Question

Question 7

Taleb Cars Ltd. issued 5,000 shares of $ 30 each at a premium of $ 5 per share, payable as:

On application $ 12 (including $ 2 premium) per share

On allotment $ 13 (including $ 3 premium) per share

On first call $ 10 per share

Applications were received for 5,000 shares and allotment was made to all. Ameen, to whom 500 shares were allotted, failed to pay the calls.

The journal entries of the first and final are:

A.

Particulares	Dr	Cr	Particulares	Dr	Cr
First and final call   A/c                                                     Share Capital        A/c             (First and final call  money    amount Due)	50,000	50,000	Bank A/c Calls in Arrears' A/c             First and final call   A/C	45,000 5,000	50,000

B.

Particulares	Dr	Cr	Particulares	Dr	Cr
Bank              A/c                                               Share Capital                A/c             (First and final call   money    amount Due)	50,000	50,000	Share Capital A/             First and final call   A/c (First and final call   money transferred to share capital	55,000	70,000

C.

Particulares	Dr	Cr	Particulares	Dr	Cr
First and final call   A/c                                               Share Capital                A/c             (First and final call amount Due)	50,000	50,000	Bank A/c                   First and final call   A/C	45,000	45,000

D.

Particulares	Dr	Cr	Particulares	Dr	Cr
Bank             A/c                                              First and final call   A/c                (Amount received for 5,000 shares)	50,000	50,000	First and final call   A/c                       Share Capital A/     (First and final call      money transferred to share capital	50,000	50,000

Answer 1

Answer : Option - A

Journal Entry of the first and final are as follows :

a. First and final call  money amount Due

First and final call   A/c...........Dr   $50,000

          Share Capital        A/c   $50,000   

(5,000 shares X $10)

b. At the time of receipt of payment :

Bank A/c (4,500 shares X $10).......................Dr    $45,000

Calls in Arrears' A/c(500 shares X $10)..........Dr   $5,000

First and final call   A/C $50,000

(5,000 shares X $10)