Joint Stock Companies
Meaning of a Company
A company is a voluntary and autonomous association of certain persons with capital divided into
numerous transferable shares formed to carry out a particular purpose in common. It is an artificial
person created by law to achieve the object for which it is formed. Section 3(1) (i) of the Companies Act,
1956 defines a company as “Company formed and registered under this Act or an existing company.”
Share Capital
No trading concern can run without capital. The divisions of share capital are:
a) Nominal or Registered or Authorized Capital. The amount of capital with which the company
intends to be registered is called registered capital. It is the maximum amount which the
company is authorized to raise by way of public subscription. There is no legal limit on the
extent of the amount of authorized capital.
b) Issued Capital: That part of the authorized capital which is offered to the public for subscription
is called issued capital.
c) Subscribed Capital: That part of the issued capital for which applications are received from the
public is called the subscribed capital.
d) Called up Capital: The amount on the shares which is actually demanded by the company to be
paid is known as called up capital.
e) Paid up Capital: The part of the called up capital which is offered and is actually paid by the
members is known as paid up capital. The sum which is still to be paid is known as calls in
arrears.
f) Reserve Capital. A company may determine by a special resolution that any portion of its share
capital which has not been already called up shall not be capable of being called-up except in
the event of winding up of the company. Such type of share capital is known as reserve capital.
Application for Shares
Whenever shares are to be issued by a company, an advertisement in a leading newspaper is given for
the information of the general public alongwith some important extracts of the prospectus. Those who
are interested to purchase the shares on the basis of that information may have the prospectus for
detailed information and application form. If a person is satis- fied with the profitability and other things
he is required to fill up the application form and to deposit this alongwith the requisite amount (known
as application money) with the pre- scribed scheduled bank. The application money should at least be 5
per cent of the face value of the share. The scheduled bank will send this application money alongwith a
list of appli- cants to the company. The company will ultimately record these in the “Application and
Allotment Book”
Allotment of Shares
After receiving the applications the directors take steps to allot the shares. Allotment of shares means
acceptance of the offer of the applicant for the purchase of shares. Directors have discretionary power
either to reject or to accept partially the applications. There are no re- strictions on the rights of a
private company to allot its shares. But the public company cannot allot its shares unless:
a) i. The minimum subscription stated in the prospectus has been subscribed by the public. ii.
A prospectus or a statement in lieu of prospectus has been filed with the Registrar before
making the first allotment.
b) iii. The amount of application, i.e., at least 5% of the face value has been received.
The applicants, to whom shares are allotted, will be sent allotment letters. After allotment, they
become the shareholders of the company. Those to whom shares could not be allotted will be sent a
letter of regret along with refund of their application money. The shareholders will be required to pay
the allotment money on allotment of shares which will also be re- corded in the Application and
Allotment Book.
Calls on Shares
Out of the face value of the shares, 5% is payable with application, some money will be paid on
allotment and rest money will be paid as and when calls are made by the company. Generally the
prospectus gives the dates of different calls along with the amount of the calls by shareholders. In case
it is not given in the prospectus, the directors have the discretion to call it in one call or more than one
call. For this a resolution of the Board of Directors must be passed and a notice is sent to the
shareholders with a request to pay the amount of the call.
Journal Entries
Sl
no
Particulars
On Receipt of Application
1 Money
Bank A/c
To Share Application A/c
For excess share application
2 money refunded
Share Application A/c
To Bank A/c
For Share application money
3 transferred to share capital
Share Application A/c
To Share Capital A/c
Amount
Amount
To Securities Premium A/c (if
application money includes
premium)
For Share allotment Money
4 due
Share Allotment A/c
Discount on Issue of shares
A/c Dr (if issued at a discount)
To Share Capital A/c
To Securities Premium (if
issued at a premium)
For Share allotment money
5 received
Bank A/c Dr
Calls-in-Arrear A/c Dr
To Share Allotment A/c
To Calls-in-Advance A/c (if call
money received in advance
alongwith allotment)
6 For Share Call money due
Share Call A/c Dr.
To Share Capital A/c
7 For Call money received
Bank A/c Dr
Call-in-Arrear A/c Dr. (if call
money not received)
Calls-in-Advance A/c Dr.
(adjustment of share call
money received earlier)
To Share Call A/c
8 For forfeiture of shares
Share Capital A/c Dr (No. of
shares forfeited × Called up
value per share)
Securities Premium A/c Dr. (if
issued at a premium and
premium not received)
To Calls-in-Arrear A/c (amount
not received on forfeited
shares)
To Shares Forfeited A/c
(amount received on forfeited
shares)
To Discount on Issue of Shares
A/c (if issued at a discount)
9 For reissue of forfeited shares
Bank A/c Dr (No. of Shares
Reissued × Reissue
Price/Share)
Discount on Issue of Shares
A/c Dr (No. of shares Reissued
× Discount per share, if
originally issued at a discount)
Shares Forfeited A/c Dr. (No.
of shares × Further discount
on reissue)
To Share Capital A/c (No. of
shares Reissued × Paid up
value per share)
To Securities Premium A/c (if
reissued at a premium)
For transferring profit on
10 reissue of forfeited shares
Shares Forfeited A/c Dr.
(Profit on Forfeiture— Further
discount on reissue of such
forfeited share)
To Capital Reserve
Example 1
PK Ltd. made an issue of 10,00,000 equity shares of Rs. 10 each, payable Rs. 2 on application, Rs. 4 on
allotment and Rs. 4 on call. All the shares are subscribed and amounts duly received. Pass journal
entries to give effect to these. Also show relevant items in the Balance Sheet.
P K Ltd.
Journals
Particulars
Bank Account
To Equity Share Application Account
(Share application money on 10,00,000
equity shares @ Rs. 2 each received)
Equity Share Application Account
To Equity Share Capital Account
(Share application money transferred
to share capital account)
Equity Share Allotment account
To Equity Share Capital Account
Amount Amount
2000
2000
(Share Allotment due on 10,00,000
shares @ Rs. 4 per share)
Bank Account
To Equity Share Allotment Account
(Allotment money received)
Equity Share First and Final Call A/C
To Equity Share Capital Account
2,000
2,000
4,000
4,000
4,000
4,000
4,000
4,000
(Share 1st and Final Call due on
10,00,000 shares @ Rs.4/)
Bank Account
To Equity Sh. First and Final Call A/C
4,000
4,000
(For shares First and Final Call money
received on 10,00,000 shares @ Rs. 4
per share)
Balance Sheet of PK Ltd
Liabilities
Issued, Subscribed and
Paid up
Capital:
10,00,000 equity
shares of Rs. 10 each
fully called and paid
up
Amount
Assets
Cash at Bank
Amount
10,000
10,000
10,000
10,000
When Both Preference and Equity Shares are Issued
When a company issues both preference and equity shares then it is desirable that the entries for
application money, allotment money and calls money should be separately passed for each type of
share capital. The word Equity or Preference must invariably be used in all the circumstances.
Issue of Shares for Purchase of Assets
If the shares have been allotted to any person or firm from whom the company has pur- chased any
asset, the following entry will be passed:
Asset Account
To Share Capital Account
(Being shares allotted in consideration of purchase of an asset for the company)
This fact should also be disclosed in the Balance Sheet while showing the issued, subscribed and paid up
capital.
Issue of Shares at Premium
A company may issue shares at a premium, i.e., at a value greater than its face value. The power to
issue shares at a premium need not be given in the Articles of Association. Premium so received shall be
credited to a separate account called Securities Premium Account. Section 78 of the Companies Act,
1956 gives the purposes for which share premium account may be applied by the company. These are:
1) For the issue of fully paid bonus shares to the members of the company;
2) For writing off preliminary expenses of the company;
3) For writing off the expenses of the commission paid or discount allowed on any issue of shares
or debentures of the company; and
4) For providing premium payable on the redemption of any redeemable preference shares or
debentures of the company.
Example 2
AB & Co. Ltd. issued 500, 00,000 Equity shares of Rs. 10 each at a premium of Rs 4 per share payable
Re.1 per share on application. Rs. 6 per share on allotment (including premium), Rs.3 on first call and
the balance on final call. The shares were all subscribed and all money due was received except the first
call money on 1, 00,000 shares and the Final call money on 1, 50,000 shares. Give the Cash Book and
Journal entries to record the above transactions.
Solution 2
Cash Book
Particulars
Amount
To Equity Share
Application
To Equity Share
Allotment
To Equity Share 1st
Call
To Equity Share Final
Call
Particulars
Amount
500 By Balance c/d
6991
3000
1497
1994
6991
6991
Journals
Sl
no
Particulars
1 Equity Share Application A/c
Amount
500
500
To Equity Share Capital A/c
2 Equity Share Allotment A/c
Amount
3000
To Equity Share Capital A/c
1000
To Securities Premium A/c
2000
3 Equity Share 1st Call A/c
1500
To Equity Share Capital A/c
4 Calls in Arrear A/c
1500
3
To Equity Share 1st Call A/c
5 Equity Share Final Call A/c
3
2000
To Equity Share Capital A/c
6 Calls in Arrear A/c
2000
6
To Equity Share Final Call A/c
7009
6
7009
Issue of Shares at a Discount (Section 79)
A company can issue shares at a discount, i.e., value less than the face value subject to thefollowing
conditions:
1)
2)
3)
4)
5)
The issue of shares at a discount is authorised by a resolution passed by the company in
general meeting and sanctioned by the Central Government.
The resolution must specify the maximum rate of discount which should not exceed 10 per
cent of the nominal value of shares or such higher percentage as the Central Government
may permit.
One year must have been elapsed since the date at which the company was allowed to
commence business.
Issue must take place within two months after the date of the sanction by the court or
within such extended time as the court may allow.
Every prospectus relating to the issue of shares and every balance sheet after the issue of
shares contains particulars of the discount allowed and so much of the discount as has not
been written off.
Adjustment of Excess Money towards the Amount due on the Allotment and Calls
Sometimes a Company may not allot all the shares for which applications have been received. Because
of over subscription, allotment is either made of less number of shares or on pro-rata basis. For
example, if the company offered 100,00,000 shares of Rs.l0 each but applications for 200,00,000 shares
were received by company. The directors sent letters of regret to applicants of 50,00,000 shares and
applicants of 150,00,000 shares were allotted the 100,00,000 shares on pro-rata basis. In such a case,
application money of 50,00,000 shares will be adjusted either on allotment and on calls, if there is still
surplus money after adjusting the allotment and call money due from shareholders it will be refunded in
cash.
Forfeiture of Shares
When a shareholder fails to pay calls, the company, if empowered by its articles, may forfeit the shares.
If a shareholder has not paid any call on the day fixed for payment thereof and fails to pay it even after
his attention is drawn to it by the secretary by registered notice, the Board of Directors pass a
resolution to the effect that such shares be forfeited. Shares once forfeited become the property of the
company and may be sold on such terms as directors think fit. Upon forfeiture, the original shareholder
ceases to be a member and his name must be removed from the register of members.
Surrender of Shares
After the allotment of shares, sometimes a shareholder is not able to pay the further calls and returns
his shares to the company for cancellation. Such voluntary return of shares to the company by the
shareholder himself is called surrender of shares. Surrender of shares has no separate accounting
treatment but it will be like that of forfeiture of shares. The same entries (as are passed in case of
forfeiture of shares) will be passed in case of surrender of shares.
Reissue of Forfeited Shares
Forfeited shares may be reissued by the company directors for any amount but if such shares are issued
at a discount then the amount of discount should not exceed the actual amount received on forfeited
shares. The purchaser of forfeited reissued shares is liable for payment of all future calls duly made by
the Company.
When all Forfeited Shares are not issued
When all forfeited shares are not issued, i.e., only a part of such shares is issued, it is desirable to spread
the amount of shares forfeited account on all such forfeited shares and of the amount relating to that
part of forfeited shares which has been reissued, discount on reissue of shares should be deducted from
such amount and the balance is transferred to capital reserve being capital profit. The amount relating
to that part of shares forfeited account which has not been reissued should be shown on the liabilities
side of Balance Sheet as Shares Forfeited Account.
Example 3
A Company invited the public to subscribe for 10,000,000 Equity Shares of Rs.100 each at a premium of
Rs. 10 per share payable on allotment. Payments were to be made as follows: On application Rs. 20; on
allotment Rs. 40; on first call Rs. 30 and on final call Rs.20. Applications were received for 13,000,000
shares; applications for 2,000,000 shares were rejected and allotment was made proportionately to the
remaining applicants. Both the calls were made and all the moneys were received except the final call
on 300,000 shares which are forfeited after due notice. Later 200,000 of the forfeited shares were reissued as fully paid at Rs. 85 per share. Pass Journal entries.
Solution 3
Sl
no
Particulars
1 Bank Account
Amount
260000
To Equity Share Application
Account
Amount
260000
(Share application money
received on 13,000,000 equity
shares @ Rs.20 each)
Equity Share Application
2 Account
To Bank Account
40000
40000
(Application for 2,000,000
rejected)
Equity Share Application
3 Account
To Equity Share Capital
Account
220000
200000
To Equity Share Allotment
account
20000
(Share application money
transferred to share capital
account and excess money
used for share allotment.)
Equity Share Allotment
4 account
To Equity Share Capital
Account
To Security Premium Account
(Share Allotment due on
10,000,000 shares @ Rs. 40
per share as per the
resolution of the Board of
Directors)
5 Bank Account
To Equity Share Allotment
Account
(Allotment money received)
6 Equity Share first call Account
To Equity Share Capital
Account
(First call money due)
Bank Account
To Equity Share First call
Account
(First call money received)
Equity Share Final Call
7 Account
To Equity Share Capital
Account
(Share Final Call due)
Equity Share Final Call
8 Account
To Equity Sh. Final Call
Account
(Share Final Call due)
9 Bank Account
400000
300000
100000
380000
380000
300000
300000
300000
300000
3,00,000
3,00,000
200000
200000
194000
To Equity Sh. Final Call
Account
(Final Call money received
except 300,000 Shares)
10 Equity Share Capital Account
194000
30000
To Equity Sh. Final Call
Account
To Forfeited share Account
6000
24000
(300,000 shares forfeited for
non payment of final call
money)
Working Note:
On 300,000 forfeited shares, the total amount
forfeited is Rs. 24,000.
For 200,000 such shares the amount will be
(200,000/300,000) x
16,000
24,000
Less, Discount on
3,000
Reissue
Transferred to Capital
Reserve
13,000
Balance of Forfeited share account will be shown in balance sheet as ‘Forfeited Share Ac- count” in
liability side
Example 4
X Ltd. issued 10,000 Equity shares of Rs. 10 each at a premium of Rs. 2 per share, payable : Rs. 3 on
application (including premium of Re. 1); Rs. 4 on allotment (including the balance of premium) and the
balance in a call. Public subscribed for 12,000 shares. Excess application money was refunded. One
shareholder Mr. A holding 50 shares paid the call money along with allotment. Another Mr. B failed to
pay allotment & call on 30 shares.
These shares were forfeited after the call and 25 of those were reissued at Rs. 9 each. Pass Journals and
prepare the Balance sheet of the company.
Solution 4
Sl
no
Particulars
1 Application Money Received
Bank A/c
Amount
36000
Amount
To Equity Shares Application
A/c
Refund of excess application
2 money
Equity Share Application A/c
To Bank A/c
Transfer of share application
3 to share capital
Equity Shares Application A/c
To Equity Shares Capital A/c
To Securities Premium A/c
4 Allotment Money Due
Equity Shares Capital A/c
To Equity Share Capital A/c
To Securities Premium A/c
5 Allotment Money Received
Bank A/c [9,970×4 + 50×5]
Calls-in-Arear A/c (30×4)
To Equity Share Allotment A/c
To Calls-in-Advance A/c
6 Share Call Money Due
Equity Share Final call A/c
36000
6000
6000
30000
20000
10000
40000
30000
10000
40130
120
40000
250
50000
To Equity Share Capital A/c
50000
Call Money Received,
Adjustment of Calls-in7 Advance
Bank A/c (9,920×5)
Calls-in-Arrear A/c
Calls-in-Advance A/c
49600
150
250
(Received with Allotment, now
adjusted)
To Equity Shares First & Final
Call A/c
8 Forfeiture of Shares
Equity Share Capital A/c
(30×10)
Securities Premium A/c (30×1)
To Calls-in-Arrear A/c
To Shares Forfieted A/c
9 Reissue of Forfeited Shares
Bank A/c (25×9)
Shares Forfeited A/c (25×1)
50000
300
30
270
60
225
25
To Equity Shares Capital A/c
Transfer of Profit on Reissue of
10 Forefeited shares
Shares Forfeited A/c
To Capital Reserve A/c
250
25
25
Profit on forfeiture Rs. 60
Therefore, Proportionate profit on 25 shares (those are reissued) = 60/30 ×25 =
50
Less : Discount on Reissue (25×1) = 25
Transfer to Capital Reserve 25
Liabilities
Authorised Capital
Called up & Paid up
Capital
9,995 shares
@ Rs. 10 each
Securities Premium
Shares forfeited A/c
Capital Reserve
Amount
Amount Assets
10,000×10 1,00,000 Fixed Assets
Amount
Amount
Investments Current
Assets, Loans &
99,950 Advances
19970 Cash at Bank
119955
Miscellaneous
Expenditure
(to the extent not
10 written off)
25
119955
119955
Example 5
B Ltd issued 2,000 shares of Rs. 100 each at a premium of 10% payable as follows :On application Rs 20 (1st Jan. 2008). On allotment Rs.40 (including premium) (1st April 2008). On First
Call Rs. 30 (1st June 2008). On Second & Final call Rs. 20 (1st Aug 2008). Applications were received for
1,800 shares and the directors made allotment in full. One shareholder to whom 40 shares were
allotted paid the entire balance on his share holdings with allotment money and another share holder
did not pay allotment and 1st call money on his 60 shares but which he paid with final call.
Required: Calculated the amount of interest paid and received on calls -in- advance and calls in arrears
respectively on 1st Aug. 2008.
Solution 5
Calculation of Interest on Calls-in-advance
On Rs. 1200 (i.e. 40 x Rs. 30) for 2 months @ 6% p.a.
On Rs. 800 (i.e. 40 x Rs.20) for 4 months @ 6% p.a.
Calculation of Interest on Calls-in-arrears
On Rs. 2400 (i.e. 60 x Rs. 40) for 4 months @ 5% p.a
On Rs. 1800 (i.e. 60 x Rs.30) for 2 months @ 5% p.a.
Rs. 12
Rs. 16
28
Rs. 40
Rs. 15
55
Example 6
A limited Company was registered with a capital of Rs. 5,00,000 in share of Rs. 100 each and issued
2,000 such shares at a premium of Rs.20 per share, payable as Rs.20 per share on application, Rs. 50 per
share on allotment (including premimu) and Rs. 20 per share on first call made three months later. All
the money payable on application, and allotment were duly received but when the first call was made,
one shareholder paid the entire balance on his holding of 30 shares, and another shareholder holding
100 shares failed to pay the first call money.
Required: Give Journal entries to record the above transactions and show how they will apperar in the
company’s Balance Sheet.
Second Call @ Rs. 30 per share.
Solution 6
Particulars
Bank A/c
To Share Application A/c
[Being the issue of 2,000
shares and application money
received @ Rs 20 per share]
Share Application A/c
To Share Capital A/c
[Being the transfer of
application money on 2,000
shares @ Rs. 20 per share to
Share Capital A/c)
Share Allotment A/c
To Share Capital A/c
To Securities Premium A/c
[Being the allotment mony on
2,000 shares @ Rs 50 including
premium made due)
Bank A/c
To Share Allotment A/c
[Being the allotment money on
2,000 shares
@ Rs. 50 per share received)
Share First Call A/c
To Share Capital A/c
[Being the first call mony on
2,000 shares @ Rs 20 per
share made due)
Bank A/c
To Share First Call A/c
To Call-paid-in-advance A/c
(Being the first call money on
1,900 shares @ Rs. 20 per
share and share Second call
money on 30 shares
@ Rs. 30 per share received)
Amount Amount
40000
40000
40000
40000
100000
60000
40000
100000
100000
40000
40000
38900
38000
900
Liabilities
Amount
Amount
Assets
Authorised Capital
5,000 shares of Rs.100
each
Current Assets, Loans
500000 & Advances
Issued Capital
2,000 shares of Rs.
100 each
200000 Cash at Bank
Subscribed Capital
2,000 shares of Rs.100
each Rs. 70 per share
Capital paid up
Less: Calls Unpaid
Reserves & Surplus:
Securities Premium
Current Liabilities
Calls paid-in-advance
140000
2000
Amount
Amount
1,78,900
138000
40000
9000
178900
178900
Example 7
B Ltd purchase the assets of Rs. 10, 80,000 from C Ltd. The consideration was payable in fully paid
equity shares of Rs. 100 each. Required: Show the necessary journal entries in books of B Ltd. assuming
that —
a) Such shares are issued at par
b) Such shares are issued at premium of 20%
c) Such shares are issued at discount of 10%
Solution 7
Particulars
Sundry Assets A/c
To C Ltd.
Amount
Amount
10,80,000
10,80,000
[Being the purchase of
assets from Y Ltd. as per
agreement dated...)
Case (a) When Shares are
issued at par
C Ltd.
To Equity Share Capital A/c
10,80,000
10,80,000
(Being the issue of 10,800
shares at par to C Ltd. as
per agreement dated...)
Case (b) When Shares are
issued at a premium of 20%
C Ltd.
To Equity Share Capital A/c
To Securities Premium A/c
10,80,000
900000
180000
(Being the issue of 9,000
shares at 20% premium to
C Ltd. as per Board’s
Resolution dated...)
Case (c) When Shares are
issued at a discount of 10%
C Ltd.
Discount on Issue of Shares
A/c
To Equity Share Capital A/c
(Being the issue of 12,000
shares at a discount of 10%
to
10,80,000
120000
1200000
C Ltd., as per Board’s
Resolution dated...)
A. Amount to be paid (Rs)
B. Issue Price Per Share (Rs)
C. No. of Shares to be issued (A/B)
At Par
10,80,000
100
10,800
At a Premium
10,80,000
120
9,000
At a Discount
10,80,000
90
12,000
Example 8
SOS Limited issued a prospectus inviting applications for 6,000 shares of Rs. 10 each at a premium of Rs
2 per share, payable as follows; On application Rs 2 per share; On allotment Rs 5 per share (including
premium): On 1st call Rs 3 per share; On Second and Final Call Rs 2 per share., Applications were receive
for 9,000 shares and allotment was made prorata to the applicants of 7,500 shares, the remaining
applicants were refused allotment. Money overpaid on applications was applied towards sums due on
allotment. D to whom 100 shares were allotted, failed to pay the allotment money and on his
subsequent failure to pay the first call, his shares were forfeited. Z, the holder of 200 shares, failed to
pay both the calls, and his shares were forfeited after the second and final call.
Of the shares forfeited 200 shares were sold to C credited as fully paid up for Rs 8.50 per share, the
whole of D’s shares being included. Required: Show Journal and Cash Book entries in the books of the
company.
Solution 8
Cash Book
Particulars
To Share Capital:
(Rs. 2 on 9,000 shares)
To Share Allotment a/c
(allotment money received)
To Share 1st Call a/c
(Rs. 3on 5,700 shares)
To Share 2nd & Final Call a/c
To Share Capital a/c
(Rs. 8.50 on 200 shares)
Particulars
Share Application A/c
To Share Capital
(Being Share application
money transferred to Share
Capital
Account)
Share Application A/c
To Share Allotment A/c
(Being Share application
money at Rs.2 on 1,500 shares
adjusted against allotment.)
Share Allotment A/c
To Share Capital A/c
To Securities Premium A/c
[Being the allotment money
due]
Share First Call A/c
To Share Capital A/c
[Being the first call money
due]
Share Capital A/c
Rs
18,000
Particulars
By Share Application a/c
Rs
3,000
26,550
By Balance c/d
71,750
17,100
11,400
1,700
74,750
74,750
Amount Amount
12000
12000
3000
3000
30000
18000
12000
18000
18000
800
Securities Premium A/c
To Forefeited Share A/c
To Share Allotment A/c
To Share First Call A/c
200
250
450
300
[Being 100 shares of Rs. 10
each, Rs. 8 per Share called up,
forfeited for non payment of
allotment and first call ]
Share Second and Final Call
A/c
To Share Capital A/c
Share Capital A/c
To Forfeited Share A/c
To Share First Call A/c
To Share Final Call A/c
[Being 200 shares of Rs. 10
each forfeited for nonpayment of first and final call]
Forfeited Share A/c
To Share Capital A/c
[Being 200 shares re-issued]
Forfeited Share A/c
To Capital Reserve A/c
11800
11800
2000
1000
600
400
300
300
450
450
[Being the transfer of profit on
re-issue]
Calculation of the amount due but no paid on allotment in Case of D.
No. of applied Shares by Mr. D. (100 x 7500/6,000)
12 5
Professor Vipin 2014
Total money sent on application by Mr. D. (125 x 2)
Rs. 250
Excess application money [ Rs 250 - (100 x Rs. 2)]
Rs. 50
Total amount due on allotment ( 100 x Rs. 5)
500
Amount due but not paid on allotment (Rs. 500 —Rs 50)
Rs.450
(ii) Calculation of allotment money received later on
Total allotment money due
Less (a) Already received
(b) Not received (as per note 1)
Rs. 30,000
Rs. 3,000
Rs.
450
3,450
26,550
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