Page 330 - VIRANSH COACHING CLASSES

5. Bank A/c ............................................................Dr. 40,000
To Equity Share Allotment A/c 40,000
(Being allotment money on 10,000 equity shares @ `
4 per share due)

6. Equity share First and Final call A/c ..................Dr. 30,000
To Equity Share Capital A/c 30,000
(Being Equity share first & Final call on 10,000
equity shares @ ` 3 per share due)

7. Bank A/c ............................................................Dr. 30,000
To Equity share First and Final call A/c 30,000
(Being equity share first & final call money on 10,000
equity shares @ ` 4 per share due)
Pro-rata/Proportionate Allotment

When the application received for shares is more than the number of shares that can be issued,
the Directors may reduce the number of shares to be alloted each applicant proportionately on the
basis of total application received and the number of shares issued. Thus under this case each applicant
gets the shares but less than those demanded applied by him.
Alternatively it can reject certain applications and refund the application money, allow full
shares to some applicants and make pro-rata allotment to others. In case of pro-rata allotment
company will adjust excess application money received against allotment money demanded from
the shareholders.
Journal Entry :
a) Share Application A/c Dr.

To share Allotment A/c
or
b) Share Application A/c Dr.
To Share Capital A/c
To Share Allotment A/c
(Being extras application money adjusted with allotment money)

6 Sanika Company Ltd issued 10000 equity shares to the public of ` 10 each. Payable as ` 2 on
st
Application, ` 5 on Allotment, and ` 3 on 1 and Final Call. All the calls were made and money
received.
Company received applications for 20,000 shares. Directors decided to allot shares to all applicants
on pro-rata basis.
Pass Journal Entries in the Books of Sanika Co. Ltd.

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