Calls In Arrears Journal Entries - YouTube

dear students generally the company will collect  money in installments for the benefit of its  shareholders

the first installment is known  as application stage the second installment  

is known as the allotment stage and third .Is  known as the call stage is allotment is a call?

yes even allotment is a call because we call  the shareholder to pay the allotment money  

after allotting the shares allotment comes  only on allotment share application money  

will be transferred to share capital real  allotment happens in share application stage  

once company allotted the shares they have the  right to call and collect the money once the shares  

has been allotted shareholders are obliged to pay  the remaining balance don't think that allotment  

happens only in allotment stage Is call is a  call ? yes .Is application is a call no because  

we collect the money and allow the shares sir when  can you say call when you pass the due entry first  

and then collection or receipt so what do you  mean by calls in arrears among called but not paid  

by the shareholders on the due date is called as  calls in areas assume the company is calling for  

allotment money when company need to collect money  from a number of shareholders there is always  

the possibility that one of them would not pay on  time they will pay later but not right immediately  

dear students you might ask when do calls in  areas occur in most cases calls in arrears occur  

during the allotment or call stage why not in  the application stage sir in application stage we  

are inviting the general public to subscribe the  shares if they buy the shares then only shares are  

allotted so what will be the accounting treatment  for calls in arrears when an installment is not  

paid either on allotment or call the relevant  installment collection entry should be debited  

however the due entry should not be altered  however the due entry should not be altered  

dear students we will start with a problem to get  a better understanding of accounting treatment KGF

limited issued 10,000 shares of rupees 10 each  at par companies collecting money in installments  

application rupees 3 allotment rupees 2 call  rupees 5 all the money due on shares were received  

except call money on thousand shares pass journal entry  dear students when application money is  

received from the general public the journal entries  will be bank account debit to share application  

account so bank account should be debited with  number of applications received into application  

money per share number of applications received 10,000 into application money three so ten thousand  

into three thirty thousand to share application  account thirty thousand only on allotment share  

application money will be transferred to share  capital so what will the journal entry share  

application account debit to share capital account  30,000 once you pass this entry applicants  

will become shareholders allotment happens in  share application stage next share allotment  

money due entry. what is the due entry dear ,share allotment  account debit to share capital account so share  

allotment account should be debited with number  of shares allotted into allotment money to be paid  

per share how much dear 10,000 into 2 = 20,000 share  allotment account debit 20,000 to share capital  

account 20,000 collection of allotment money  or receipt of allotment money so Journal entry  

bank account debit 20,000 to share allotment  A/c 20,000. all the money due on shares were  

received except call money on thousand shares when an installment is not paid the relevant  

installment collection or receipt entry should  be debited however the due entry should not be  

altered so what is the journal entry ? share  call account debit 50,000 to share capital  

account 50,000 share call money received  journal entry dear students every shareholder paid  

or is there any calls in areas ? yes all the money  due on shares were received except call money  

on thousand shares now will you receive amount  for nine thousand shares or ten thousand shares  

only for nine thousand share so  bank account should be debited with  

nine thousand into call money five rupees  so nine thousand into five forty five thousand  

bank account debit forty five thousand listen  if a shareholder fails to make a payment either  

allotment or final call it should be transferred  to a separate account known as calls in arrears so  

calls in arrears how much dear ? thousand into five  how much five thousand .calls in arrears amount is

receivable it is an asset .To share call account  fifty thousand journal entry for calls in areas  

money received bank account debit to calls in arrears  account listen my dear loveable students apart from  

paying the calls in arrears shareholders had to  pay the interest to the company from the date  

call money was due to the date money is finally  received as per companies act 2013 Table F

prescribes maximum interest rate is 10 per annum  on calls in arrears however directors have the  

power to wave off journal entries for calls in  arrears for interest receivable on calls in arrears  

shareholders account debit to interest on calls  in arrears account for interest receivable bank  

account debit to shareholders account the net  entry will be what dear shareholders account  

debit shareholders A/c debit , shareholder A/c credit cancel the net entry bank account debit  

to interest on calls in arrears interest on calls  in arrears income from viewpoint of company dear  

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