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X ltd. invited applications for the issue of 100000 equity shares of 10 each payable as on application and allotment rupees 3 per share on first call 4per share on second call 3 per share .... Application for 1500000 shares were received and pro rata allotment was mafe to all applicants. Excess application money was adjusted on the sums due on first call . when the first call was made one shareholder who had applied for 15000 shares did not pay first call money pass journal entries
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X ltd. invited applications for the issue of 100000 equity shares of 1...
Journal Entries for X Ltd.


Background Information


X Ltd. invited applications for the issue of 100000 equity shares of 10 each payable as on application and allotment rupees 3 per share on first call, 4 per share on second call, 3 per share on the final call.

Application for 1500000 shares were received and pro rata allotment was made to all applicants. Excess application money was adjusted on the sums due on the first call.

When the first call was made, one shareholder who had applied for 15000 shares did not pay first call money.

Journal Entries


The following journal entries need to be made by X Ltd.:

On Receiving Applications


Debit: Bank Account (1500000 x 10) = 15000000
Credit: Equity Share Application Account (1500000 x 10) = 15000000

On Allotment of Shares


Debit: Equity Share Application Account (100000 x 10) = 1000000
Credit: Equity Share Capital Account (100000 x 10) = 1000000

Debit: Equity Share Application Account (1400000 x 3) = 4200000
Credit: Equity Share First Call Account (1400000 x 3) = 4200000

On Receipt of Payment for First Call


Debit: Bank Account (Amount received from shareholders)
Credit: Equity Share First Call Account (Amount received from shareholders)

On Non-Payment of First Call by Shareholder


Debit: Equity Share First Call Account (15000 x 3) = 45000
Credit: Share Allotment Account (15000 x 10) = 150000
Credit: Equity Share First Call in Arrears Account (15000 x 3) = 45000

The Equity Share First Call in Arrears Account represents the amount due from the shareholder who did not pay the first call money. The amount will be carried forward and added to the second call.

On Second Call


Debit: Equity Share Second Call Account (15000 x 4) = 60000
Credit: Equity Share Second Call in Arrears Account (15000 x 3) = 45000
Credit: Bank Account (15000 x 4) = 60000

On Final Call


Debit: Equity Share Final Call Account (15000 x 3) = 45000
Credit: Bank Account (15000 x 3) = 45000

Conclusion


These journal entries will ensure that all transactions related to the issue of equity shares by X Ltd. are properly recorded in the books of accounts. It is important to maintain accurate records to ensure compliance with accounting standards and regulations.
Community Answer
X ltd. invited applications for the issue of 100000 equity shares of 1...
applications were applied for 150000 or 1500000
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X ltd. invited applications for the issue of 100000 equity shares of 10 each payable as on application and allotment rupees 3 per share on first call 4per share on second call 3 per share .... Application for 1500000 shares were received and pro rata allotment was mafe to all applicants. Excess application money was adjusted on the sums due on first call . when the first call was made one shareholder who had applied for 15000 shares did not pay first call money pass journal entries
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