Mudgal Ltd. offered 400 Lakh equity shares of ₹10 each to the public. The amount was payable as to ₹4 on application. ₹5 (including premium) on allotment and ₹3 on call. The issue was subscribed to the extent of (two and

Journal Entries in the Books of Mudgal Ltd. (In Lakhs) Date Particulars L.F. Amount (Dr.) ₹ Amount (Cr.) ₹ Bank A/c Dr. 3600 To Equity Share Application A/c 3600 (Being application money received 900 lakh shares) Equity Share Application A/c Dr. 3600 To Equity Share Capital A/c 1600 To Equity Share Allotment A/c 1120 To Bank A/c 880 (Being application money due transferred to equity share capital a/c and excess money refunded) Share Allotment A/c Dr. 2000 To Share Capital A/c 1200 To Security Premium A/c 800 (Being Allotment money due) Bank A/c Dr. 836 To Equity Share Allotment A/c 836 (Being Allotment money received) Equity Share Final Call A/c Dr. 1200 To Equity Share Capital A/c 1200 (Being Call money due) Bank A/c Dr. 1152 To Equity Share Final Call A/c 1152 (Being call money received) Share Capital A/c Dr. 160 Security Premium A/c Dr. 32 To Share Forfeiture A/c 100 To Share Allotment A/c 44 To Share Final Call A/c 48 (Being 16 lakhs shares forfeited) Bank A/c Dr. 90 Share Forfeited A/c Dr. 10 To Share Capital A/c 100 (Being 10 Lakhs Shares re-issued) Share Forfeited A/c Dr. 52.50 To Capital Reserve A/c 52.50 (Being Profit on Re-issue transferred to Capital Reserve A/c) Working Note: (in Lakh) Shares Applied Shares Allotted App. Money Due @ ₹4 App. Money Received @ ₹4 Excess money received Allotment money due @ ₹5 Excess app. Money adjusted Excess app. Money Refunded Net Allotment money received 200 Nil 800 Nil 800 Nil Nil 800 Nil 200 80 800 320 480 400 400 80 Nil 500 320 2000 1280 720 1600 720 Nil 880 900 400 3600 1600 2000 2000 1120 880 880 2. Ratio 500:320 i.e. 25:16 Shareholder holdings 16 lakh shares applied for 25 lakhs shares Money Received on 25 lakhs shares @ ₹4 = 100 lakh Application money due on 16 lakh = 64 lakh Excess money received on application = 36 lakh Amount due on allotment on 16 lakh shares @ ₹5 = 80 lakhs Arrears = 80 - 36 = 44 lakhs