question_answer

Ultimate Ltd. decided to expand its business and for this purpose it opened a new unit in the remote areas of Assam. To finance the project, it issued 1,50,000 shares of Rs. 10 each, payable as ? 3 on application, Rs. 2 on allotment, Rs. 2 on first call and the balance Rs. 3 on second and final call. The shares were fully subscribed and all the amount due was received. Pass necessary journal entries and also identify the value being conveyed in this case?

Answer:

JOURNAL

Date	Particulars		LF	Amt (Rs.)	Amt (Rs.)
	Bank A/c	Dr		4,50,000
	To Share Application A/c \[(1,50,000\times 3)\]				4,50,000
	(Being application money received on 1,50,000 shares at Rs. 3 per share)
	Share Application A/c	Dr		4,50,000
	To Share Capital A/c				4,50,000
	(Being  application money transferred to share capital account at the time of allotment)
	Share Allotment A/c	Dr		3,00,000
	To Share Capital A/c \[(1,50,000\times 2)\]				3,00,000
	(Being allotment money due on 1,50,000 shares at Rs. 2 per share)
	Bank A/c	Dr		3,00,000
	To Share Allotment A/c				3,00,000
	(Being receipt of Rs. 2 per share on 1,50,000 share)
	Share First Call A/c	Dr		3,00,000
	To Share Capital A/c \[(1,50,000\times 2)\]				3,00,000
	(Being first call money due on 1,50,000 share @ Rs. 2 per share)
	Bank A/c	Dr		3,00,000
	To Share First Call A/c				3,00,000
	(Being first call money received)
	Share Second and Final Call A/c	Dr		4,50,000
	To Share Capital A/c \[(1,50,000\times 3)\]				4,50,000
	(Being second and final call money due on 1,50,000 shares @ Rs. 3 per share)
	Bank A/c	Dr		4,50,000
	To Share Second and Final Call A/c				4,50,000
	(Being second and final call money received)

            The value being conveyed are: (i) Generation of employment opportunities (ii) Discharging social responsibility