Company AccountsQ-2 | Introduction to Company AccountsQuestion 4891 of 112
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A Limited issued 20,000 Equity shares of 10 each at a premium of 10%, payable 2 on application; 4 on allotment (including premium); ₹ 2 on first call and balance on the final call. All the shares were fully subscribed. Mr. M who held 2000 shares paid full remaining amount on first call itself. The final call which was made after 4 months from the first call was fully paid except a shareholder having 200 shares and one another shareholder having 100 shares. They paid their due amount after 3 months and 4 months respectively along with interest on calls in arrears, Company also paid interest on calls in advance to Mr. M. The Company maintains Calls in Arrear and Calls in Advance A/c. Give journal entries to record these transactions. Show workings of Interest calculation. (Ignore dates). [June 2022, 15 Marks]; [MTP Jan, 2025; Modified; Figures-10X]

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Detailed Solution & Explanation

Journal Entries Date Particulars L.F. Amount (Dr.) Amount (Cr.) Bank A/ c (20000 X 2) Dr. To Equity Share application A/ c (Being application money received @ 2 per share on 20,000 equity shares) 40,000 40,000 Equity Share application A/ c Dr. To Equity Share Capital A/ c (Being application money transferred to equity share capital A/ c) 40,000 40,000 Equity Share allotment A/ c (20000 X 4) Dr. To Equity Share Capital A/ c (20000 x 3) To Securities Premium A/ c (20000 x 1) (Being allotment money made due on 20000 equity shares) 80,000 60,000 20,000 Bank A/c Dr. To Equity Share allotment A/ c (Being allotment money received) 80,000 80,000 Equity Share First Call A/ c (20000 X 2) Dr. To Equity Share Capital A/ c 40,000 40,000 (Being First Call money made due on 20000 equity share) Bank A/c Dr. To Equity Share First Call A/ c To Calls in Advance A/ c (2000 X 3) (Being First Call money received along with calls in advance) 46,000 40,000 6,000 Equity Share final call A/ c (20000 X 3) Dr. To Equity Share Capital A/ c (Being final call money made due @ 3 per share on 20000 equity shares of 10 each) 60,000 60,000 Bank A/c Dr. Calls in Advance A/ c Dr. Calls in arrear A/ c (300 X 3) Dr. To Equity Share Final Call A/ c (Being final call money received on 17700 equity shares) 53,100 6,000 900 60,000 Interest on Calls in Advance A/ c Dr. To Bank A/c (Being interest on calls in advance paid) 240(W N1) 240 Bank A/c Dr. To Interest on calls in arrears A/ c To Calls in arrear A/ c (200 X 3) (Being interest on calls in arrear received from a shareholder (i) along with his arrear) 615 15 (WN2) 600 Bank A/ c Dr. To Calls in arrear A/c (100 X 3) To Interest on calls in arrears A/ c (Being interest on calls in arrear received from a shareholder (ii) along with his arrear) 310 300 10 (WN3) Working Note: 1. Calculation of interest on calls in advance: [200 x 3] x 12/100 x 4/12 = 240 2. Calculation of interest on calls in arrear: On (i) (200 X 3) X 10/100 x 3/12 = 15 On (ii) (100 X 3) X l0/100 x 4/12 = 10

About This Chapter: Partnership & Companies

Paper

Paper 1: Accounting

Weightage

15-20%

Key Topics

Admission, Retirement, Death, Shares, Debentures

This chapter covers Admission, Retirement, Death, Shares, Debentures and is part of Paper 1: Accounting in the CA Foundation exam.

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Exam Strategy Tip

This topic carries 15-20% weightage. Focus on understanding core concepts rather than memorizing.

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