XYZ company issued 10,000 shares of Rs. 100 each at Rs. 10 premium payable as under. On application Rs. 30 On allotment Rs. 40 (with premium) On first and final call Rs. 40 Applications were…

a) Share Application Account

Step 1: Calculate total applications received

• Applications received: 16,000 shares × Rs. 30 = Rs. 480,000
• Applications rejected: 4,000 shares (no allotment)
• Applications allotted: 12,000 shares (pro-rata)

Step 2: Calculate pro-rata allotment for 12,000 shares

• Ratio: 12,000 / 16,000 = 3/4
• Amount refunded to rejected applicants: 4,000 shares × Rs. 30 = Rs. 120,000

Journal Entry:

Share Application A/c       Dr. 480,000
  To Share Capital A/c (12,000 shares)  1,200,000
  To Share Application (Refund) A/c    120,000
  To Bank A/c (Amount received)        360,000

Final Balance in Share Application A/c: Rs. 120,000 (to be refunded)

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b) Share Allotment Account

Step 1: Calculate allotment amount

• Total allotted shares: 12,000
• Amount per share (allotment + premium): Rs. 40 (including Rs. 10 premium)
• Total allotment amount: 12,000 × Rs. 40 = Rs. 480,000

Step 2: Adjust for 400 shares paid full amount (Rs. 70)

• Amount already received for 400 shares: 400 × Rs. 70 = Rs. 28,000
• Amount to be adjusted: Rs. 28,000 (already paid) – Rs. 40 (allotment) = Rs. 28,000 – Rs. 16,000 = Rs. 12,000 (excess paid on allotment)

Journal Entry:

Share Allotment A/c       Dr. 480,000
  To Share Capital A/c (12,000 shares @ Rs. 100)  1,200,000
  To Share Premium A/c (12,000 × Rs. 10)          120,000
  To Share Allotment (Excess from 400 shares)     12,000
  To Bank A/c (Amount received)                   452,000

Final Balance in Share Allotment A/c: Rs. 12,000 (to be adjusted in calls)

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c) Share First and Final Call Account

Step 1: Calculate call amount

• Total call amount: 12,000 shares × Rs. 40 = Rs. 480,000
• Adjustment for 400 shares (already paid full):
  • Amount already paid: Rs. 70 (application + allotment)
  • Amount due on call: Rs. 40
  • Excess already paid: Rs. 70 – Rs. 70 (full paid) = Rs. 0 (no further call due)

Journal Entry:

Share First & Final Call A/c  Dr. 480,000
  To Share Capital A/c (12,000 shares)  480,000
  To Bank A/c (Amount received)        480,000

Final Balance in Share First & Final Call A/c: Rs. 0 (all calls received)

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Note: The 400-share holder’s excess payment (Rs. 12,000) is adjusted in the allotment account and does not affect the call account. All other shareholders paid their calls in full.