Shehzor Energy Ltd was established some time back with an authorized capital of 100,000 Common Stocks of Rs. 100 each. The company invited applications for issuance of 50,000 shares through its prospectus. The applications accompanied 50% advance payme

Sure! Let's break down each event and prepare the necessary accounting entries, followed by the balance sheet. ### A) Accounting Entries 1. **Receipt of Applications for 60,000 Shares:** - Total Applications Received: 60,000 shares at Rs. 100 each = Rs. 6,000,000 - Advance Payment (50%): Rs. 3,000,000 ``` Date: 15 March 2020 Debit Bank Account Rs. 3,000,000 Credit Share Application Account Rs. 3,000,000 ``` 2. **Issuing Only 50,000 Shares:** - Amount to be refunded (10,000 shares): 10,000 shares at Rs. 100 each = Rs. 1,000,000. ``` Date: 31 March 2020 Debit Share Application Account Rs. 1,000,000 Credit Bank Account Rs. 1,000,000 ``` 3. **Transfer the remaining balance from Share Application Account:** - Amount from successful applicants (50,000 shares): Rs. 5,000,000 (100%). ``` Date: 30 April 2020 Debit Share Application Account Rs. 2,000,000 Credit Share Capital Account Rs. 5,000,000 ``` 4. **Receipt of Balance 50% Payment from Successful Applicants:** - 50% of 50,000 shares at Rs. 100 each = Rs. 2,500,000. ``` Date: 15 April 2020 Debit Bank Account Rs. 2,500,000 Credit Share Capital Account Rs. 2,500,000 ``` ### Summary of Accounting Entries After recording all the events, here are the summarized journal entries: | Date | Account | Debit (Rs.) | Credit (Rs.) | |--------------------|--------------------------------------|----------------|----------------| | 15 March 2020 | Bank Account | 3,000,000 | | | | Share Application Account | | 3,000,000 | | 31 March 2020 | Share Application Account | 1,000,000 | | | | Bank Account | | 1,000,000 | | 30 April 2020 | Share Application Account | 2,000,000 | | | | Share Capital Account | | 5,000,000 | | 15 April 2020 | Bank Account | 2,500,000 | | | | Share Capital Account | | 2,500,000 | ### B) Balance Sheet of Shehzor Energy Ltd as of 30 April 2020 ```plaintext SHEHZOR ENERGY LTD Balance Sheet As at 30 April 2020 Liabilities Rs. Assets Rs. ---------------------------------------------------------------------------------- Share Capital 5,000,000 Bank Account 5,500,000 Less: Share Application Account (Refunded) 1,000,000 ---------------------------------------------------------------------------------- Total Current Liabilities 4,000,000 ---------------------------------------------------------------------------------- Total Liabilities 4,000,000 Total Assets 5,500,000 ``` ### Notes: - **Share Capital** includes the total of successful applications (50,000 shares at Rs. 100). - **Bank Account** reflects the total funds received, which is Rs. 5,500,000 (initial applications after accounting for the refunds and the balance 50% received). - No other asset or liability items are identified in the problem, so the balance sheet shows only the pertinent items. This accounts for the critical events as described and presents a straightforward balance sheet.