31 :- Pure Products Ltd. is registered with authorised capital of Rs 10,00,000 divided into 1,00,000 equity shares of Rs 10 each. It issued 70,000 Equity shares for subscription at premium of Rs 2 per share, payable Rs 3 on application, Rs 5 on allotment and Balance on first and final call. It received application money amounting to Rs 1,89,000.
You are required to :
(i) Determine whether the company should allot shares; and
(ii) If yes, pass the necessary Journal entries assuming that the company has received due amount on allotment and call.
Solution :-
Number of shares = Money Received on Application/Application Money
= 1,89,000/3 = 63,000