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Chapter: Company Accounts – Issue of Shares· Book-Keeping & Accountancy

Saraswati and Sons Ltd., Nagpur invited applications for 50,000 equity shares of ₹ 10 each, payable as under:Amount per share (₹)On Application3On Allotment3On First and Final call4Applications were received for 50,000 shares. All the shares were all…

Q.5 Saraswati and Sons Ltd., Nagpur invited applications for 50,000 equity shares of ₹ 10 each, payable as under:

Amount per share (₹)
On Application3
On Allotment3
On First and Final call4

Applications were received for 50,000 shares. All the shares were allotted. All the money was duly received except First and Final call on 5000 shares, which were forfeited.

Pass Journal Entries in Books of Saraswati and Sons Ltd.

OR

Balance Sheet of Olam Ltd. for the year ending 31st March, 2021 is given below:

Balance Sheet as on 31st March, 2021

LiabilitiesAmount (₹)AssetsAmount (₹)
Equity Share Capital4,50,000Fixed Assets4,50,000
Preference Share Capital40,000Investments75,000
Reserve and Surplus75,000Current Assets3,65,000
Secured Loans1,50,000
Unsecured Loans1,00,000
Current Liabilities75,000
8,90,0008,90,000

You are required to prepare common size statement for the year ending 31st March, 2021.

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Answer: Share capital is credited with ₹ 5,00,000 in all; on forfeiture of 5,000 shares Share Capital is debited ₹ 50,000, First and Final Call credited ₹ 20,000 and Share Forfeiture credited ₹ 30,000. (OR: Equity Share Capital 50.56%, Fixed Assets 50.56%, Current Assets 41.01% of the total.)

Journal entries in the books of Saraswati and Sons Ltd.

DateParticularsL.F.Debit (₹)Credit (₹)
Bank A/c Dr.
To Equity Share Application A/c
(Application money received on 50,000 shares @ ₹ 3)		1,50,000
1,50,000
Equity Share Application A/c Dr.
To Equity Share Capital A/c
(Application money transferred to share capital on allotment)		1,50,000
1,50,000
Equity Share Allotment A/c Dr.
To Equity Share Capital A/c
(Allotment money due on 50,000 shares @ ₹ 3)		1,50,000
1,50,000
Bank A/c Dr.
To Equity Share Allotment A/c
(Allotment money received)		1,50,000
1,50,000
Equity Share First and Final Call A/c Dr.
To Equity Share Capital A/c
(First and final call due on 50,000 shares @ ₹ 4)		2,00,000
2,00,000
Bank A/c Dr.
To Equity Share First and Final Call A/c
(Call money received on 45,000 shares @ ₹ 4)		1,80,000
1,80,000
Equity Share Capital A/c Dr.
To Equity Share First and Final Call A/c
To Share Forfeiture A/c
(5,000 shares forfeited for non-payment of call: capital called up ₹ 10 per share cancelled, unpaid ₹ 4 per share and amount received ₹ 6 per share forfeited)		50,000
20,000
30,000

After forfeiture the paid-up capital is 45,000 shares × ₹ 10 = ₹ 4,50,000 and Share Forfeiture Account shows ₹ 30,000.

OR: Common Size Balance Sheet of Olam Ltd. as on 31st March, 2021

Each item is expressed as a percentage of the Balance Sheet total of ₹ 8,90,000: Percentage = (Amount of item ÷ Total) × 100.

ParticularsAmount (₹)Percentage (%)
I. Equity and Liabilities
Equity Share Capital4,50,00050.56
Preference Share Capital40,0004.49
Reserve and Surplus75,0008.43
Shareholders’ Funds (sub-total)5,65,00063.48
Secured Loans1,50,00016.85
Unsecured Loans1,00,00011.24
Non-current liabilities (sub-total)2,50,00028.09
Current Liabilities75,0008.43
Total8,90,000100.00
II. Assets
Fixed Assets4,50,00050.56
Investments75,0008.43
Current Assets3,65,00041.01
Total8,90,000100.00

Interpretation: owners’ funds finance about 63% of the total assets and long-term borrowings about 28%, while fixed assets form about half of the total assets.

Doubtly AI · 29 Oct 2026 AI-generated · not yet verified Report
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