MCS Ltd. issued 40,000 shares of Rs. 10 each payable as Rs. 2 per share on application, Rs. 4 per share on allotment and the balance in two equal instalments.
Applications were received for 80,000 shares and the allotment was made as follows:
(a) Applicationsof 50,000 shares were allotted 30,000 shares.
(b) Application of 30,000 shares were allotted 10,000 shares.
Neeraj, to whom 600 shares were allotted from Category (a), failed to pay the allotment money. Pass necessary Journal entries up to allotment only.

Explanation

Working Notes:
1. Amounts due but not paid by Neeraj on Allotment:
(a) Number of shares applied by Neeraj `=50,000//30,000 xx 600 = 1,000`.
(b) Application money received from Neeraj `=1,000xx Rs. 2=Rs. 2,000`.
(c) Application money required as per shares allotted to Neeraj `=600xxRs. 2=Rs. 1,200`.
(d) Surplus application money (Rs. 2,000 - Rs. 1,200) to be adjustment on allotment = Rs. 800.
(e) Allotment money due from Neeraj `=600xxRs. 4 = Rs. 2,400`.
(f) Allotment Amount not paid by Neeraj =Rs. 2,400-Rs. 800= Rs. 1,600.
`{:("Net Amount Received on Allotment:",," Rs."),("Total amount due to allotment",,"1,60,000"),("Less: Excess application money adjusted",," 80,000"),(,,bar(" "80,000)),("Less: Allotment Money not paid by Neeraj (WN 1)",," 1,600"),("Amount Received on Allotment",,ulbar(ul(" "78,400))):}`