Required: Journal entries for: (a) Share application. (b) Share allotment. (c) Share first and final call.

Steps to Solve

1. Share Application Entry
   Record the amounts received from the share application.
   The company received applications for 22,000 shares at Rs. 4 each:
   $$ \text{Amount} = 22,000 \text{ shares} \times Rs. 4 = Rs. 88,000 $$

2. Share Allotment Entry
   Record the allotment entries based on the shares allotted:

• Full payment for 12,000 shares:
  $$ 12,000 \text{ shares} \times Rs. 3 = Rs. 36,000 $$
• For 8,000 shares where Rs. 3 was paid, the amount is:
  $$ 8,000 \text{ shares} \times Rs. 3 = Rs. 24,000 $$
• For 2,000 shares, they are allotted but paid nil.
  Total allotment amount received is:
  $$ Rs. 36,000 + Rs. 24,000 = Rs. 60,000 $$

3. Share First and Final Call Entry
   Record the first and final call amounts per share.
   All shares have a call of Rs. 3 each, totaling:
   $$ 16,000 \text{ shares} \times Rs. 3 = Rs. 48,000 $$
   Amount received for the call is recorded as:

• For the allotment of the full 12,000 shares:
  $$ 12,000 \text{ shares} \times Rs. 3 = Rs. 36,000 $$
• For the 8,000 shares:
  $$ 4,000 \text{ shares} \times Rs. 3 = Rs. 12,000 $$
• For the nil share payment in 2,000, that remains nil.
  Total amount from the first and final call should be recorded as:
  $$ Rs. 36,000 + Rs. 12,000 = Rs. 48,000 $$

4. Adjustment of Excess Application Money
   The excess amount received on application is adjusted against the allotment and future calls.
   Total application amount was Rs. 88,000, and total demand was Rs. 60,000 (allotment) + Rs. 48,000 (calls) = Rs. 108,000.
   Since all calls are due, we can adjust as:
   $$ Rs. 88,000 - Rs. 60,000 = Rs. 28,000 \text{ (excess amount)} $$

5. Final Journal Entries
   We finalize the journal entries for share application, allotment, and final call.

• Debit Bank and Credit Share Capital for each part of the process above.