Company AccountsQ-6 | Introduction to Company AccountsQuestion 4895 of 112
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Arpit Ltd., with an authorized capital of ₹ 20,00,000 divided into Equity shares of 10 each, on 1st June, 2023, invited applications for issuing 3,00,000 Equity shares at a premium of 5 per share. The amount was payable as follows: On Application 2 per share On Allotment (1st July, 2023) 7 (including premium) per share On First call (1st Nov., 2023) 3 per share On Final call (1st Jan., 2024) 3 per share All the shares were applied for and allotted. Mr. Naresh who held 20,000 shares paid the whole of the amount due on calls along with allotment money. The final call was fully paid except a shareholder having 5,000 shares who paid his due amount on 1st March, 2024 i.e. after 2 months along with interest on calls in arrears @ 10% p.a. Company also paid interest @ 12% p.a. on calls in advance to Mr. Naresh on 1st Jan., 2024. Give journal entries with narrations to record all these transactions in the books of Arpit Ltd. [Jan. 2025, 15 Marks]

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Detailed Solution & Explanation

In the Books of Arpit Ltd. Journal Entries Date Particulars L.F. Amount (Dr.) Amount (Cr.) 2023 1 June Bank a/ c (300000 eq. sh. X 2) Dr. To Equity Share Application a/ c 6,00,000 6,00,000 (Being share application money received on 3,00,000 eq. shares of~ 10 each @ 2 per share) Equity Share Application a/ c Dr. To Equity Share Capital a/ c (Being share application money transferred to equity share capital a/ c) 6,00,0000 6,00,000 l July Equity Share Allotment a/c Dr. (300000 eq.sh X7) To Equity Share Capital a/c (300000 eq.sh X 2) To Securities Premium a/c (300000 eq. sh X 5) (Being share allotment money made due on 3,00,000 equity share of10 each @ 7 per share) 21,00,000 6,00,00 15,00,000 Bank a/c Dr. To Equity Share Allotment a/c To Calls in advance a/c (20000 eq. sh X 6) (Being allotment money received along with Ist & IInd call money on 20,000 eq. share) 22,20,000 20,00,000 1,20,000 1 Nov. Equity Share Ist Call a/c (300000 eq.sh X3) Dr. To Equity Share Capital a/c (Being Ist call made money due on 3,00,000 eq, shares of 10 each @ ₹ 3 per share) 9,00,000 9,00,000 Bank a/c Dr. Calls in advance a/c (20000 eq.sh X3) Dr. To Equity Share Ist Call a/c (Being Ist Call money received and calls in advances adjusted) 8,40,000 60,000 9,00,000 2024 1 Jan Eq. Share IInd Call a/c (300000 eq.sh X3) Dr. To Equity Share Capital a/c (Being shares IInd call money made due on 3,00,000 eq. shares of 10 each @ 3 per share) 9,00,000 9,00,000 Bank a/c (275000 eq.sh X3 ) Dr. Calls in advance a/c (20000 eq.sh X3) Dr. Calls in arrears a/c (5000 eq.sh X 3) Dr. To Equity Share IInd Call a/c (Being Share IInd Call money received on 2,75,000 eq. share and adjustment made for calls in advance and calls in arrears) 8,25,000 60,000 15,000 9,00,000 1 Jan Interest on call in advance a/ c (1) Dr. To Bank a/c 6,000 6,000 (Being interest on calls in advance paid to Mr. Naresh for his advances) 1 Mar Bank a/c Dr. To Calls in arrears a/ c To Interest on calls in arrears a/c (2) (Being calls in arrears and interest on calls in arrears received on 5,000 equity share) 15,250 15,000 250 Working Notes: 1. Calculation of interest on calls in advance Interest on Ist Call (3 X 20000 eq.sh) X 4/12 x 12/100 = 2,400 Interest on IInd Call (3 X 20000 eq.sh) x 6/12 x 12/100 = 3,600 = 6,000 2. Calculation of interest on calls in arrears (3 X 5000 eq.sh) X 2/12 x 10/100 = 250 Note:- The above solution has been provided on the assumption that the company have complied with the necessary legal formalities under Sec. 61 of the Companies Act, 2013, to increase the authorised capital up to 3,00,000 equity shares so as to accommodate the fresh issue of shares. UNIT – 3 (Issue of Debentures)

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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