Mahalaxmi Ltd. issued 25,000 equity shares of ₹ 100 each payable as under :₹ 20 on Application₹ 30 on Allotment₹ 20 on First call₹ 30 on Second and Final Call.Applications were received for 29,000 equity shares. The excess application money was adjus…

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Q.5 Mahalaxmi Ltd. issued 25,000 equity shares of ₹ 100 each payable as under : ₹ 20 on Application ₹ 30 on Allotment ₹ 20 on First call ₹ 30 on Second and Final Call. Applications were received for 29,000 equity shares. The excess application money was adjusted towards allotment. All the money was duly received except second and final call on 1,000 equity shares. Pass necessary journal entries in the books of Mahalaxmi Ltd.

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Answer: Journal entries in the books of Mahalaxmi Ltd. (excess application money ₹ 80,000 adjusted to allotment; calls in arrears ₹ 30,000). Working notes: Application money received = 29,000 × 20 = ₹ 5,80,000; required on allotted shares 25,000 × 20 = ₹ 5,00,000; excess 4,000 × 20 = ₹ 80,000 adjusted towards allotment. Allotment due 25,000 × 30 = ₹ 7,50,000; cash received 7,50,000 − 80,000 = ₹ 6,70,000. Second call due 25,000 × 30 = ₹ 7,50,000; not received on 1,000 shares = ₹ 30,000; received ₹ 7,20,000. Journal of Mahalaxmi Ltd. No.ParticularsDebit (₹)Credit (₹) 1Bank A/c ...Dr.5,80,000 To Equity Share Application A/c5,80,000 (Being application money received on 29,000 shares @ ₹ 20) 2Equity Share Application A/c ...Dr.5,80,000 To Equity Share Capital A/c5,00,000 To Equity Share Allotment A/c80,000 (Being application money on 25,000 shares transferred to capital and excess adjusted towards allotment) 3Equity Share Allotment A/c ...Dr.7,50,000 To Equity Share Capital A/c7,50,000 (Being allotment money due on 25,000 shares @ ₹ 30) 4Bank A/c ...Dr.6,70,000 To Equity Share Allotment A/c6,70,000 (Being balance allotment money received) 5Equity Share First Call A/c ...Dr.5,00,000 To Equity Share Capital A/c5,00,000 (Being first call money due on 25,000 shares @ ₹ 20) 6Bank A/c ...Dr.5,00,000 To Equity Share First Call A/c5,00,000 (Being first call money received) 7Equity Share Second and Final Call A/c ...Dr.7,50,000 To Equity Share Capital A/c7,50,000 (Being second and final call due on 25,000 shares @ ₹ 30) 8Bank A/c ...Dr.7,20,000 Calls in Arrears A/c ...Dr.30,000 To Equity Share Second and Final Call A/c7,50,000 (Being second and final call received except on 1,000 shares)

Mahalaxmi Ltd. issued 25,000 equity shares of ₹ 100 each payable as under :₹ 20 on Application₹ 30 on Allotment₹ 20 on First call₹ 30 on Second and Final Call.Applications were received for 29,000 equity shares. The excess application money was adjus…

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No.	Particulars	Debit (₹)	Credit (₹)
1	Bank A/c ...Dr.	5,80,000
	To Equity Share Application A/c		5,80,000
	(Being application money received on 29,000 shares @ ₹ 20)
2	Equity Share Application A/c ...Dr.	5,80,000
	To Equity Share Capital A/c		5,00,000
	To Equity Share Allotment A/c		80,000
	(Being application money on 25,000 shares transferred to capital and excess adjusted towards allotment)
3	Equity Share Allotment A/c ...Dr.	7,50,000
	To Equity Share Capital A/c		7,50,000
	(Being allotment money due on 25,000 shares @ ₹ 30)
4	Bank A/c ...Dr.	6,70,000
	To Equity Share Allotment A/c		6,70,000
	(Being balance allotment money received)
5	Equity Share First Call A/c ...Dr.	5,00,000
	To Equity Share Capital A/c		5,00,000
	(Being first call money due on 25,000 shares @ ₹ 20)
6	Bank A/c ...Dr.	5,00,000
	To Equity Share First Call A/c		5,00,000
	(Being first call money received)
7	Equity Share Second and Final Call A/c ...Dr.	7,50,000
	To Equity Share Capital A/c		7,50,000
	(Being second and final call due on 25,000 shares @ ₹ 30)
8	Bank A/c ...Dr.	7,20,000
	Calls in Arrears A/c ...Dr.	30,000
	To Equity Share Second and Final Call A/c		7,50,000
	(Being second and final call received except on 1,000 shares)