Calls-in-Arrears

 Calls-in-Arrears means the amount not received by the company or not paid by shareholders against the amount called towards share capital.
Accounting of Calls-in-Arrears
There are two methods of accounting of Calls-in-Arrears:
 (i) Without Opening Calls-in-Arrears Account
Under this method amount not received from the shareholder is not transferred to Call-in Arrear Account .
(ii) By Opening Calls-in-Arrears Account
Under this method Unpaid Amount is transfer to Call- in Arrear Account  .
CALLS-IN-ADVANCE
 A company may, if its Articles of Association allows, accept the amount against the call or calls not yet made. The amount so received in advance is credited to Calls-in-Advance Account. As discussed earlier, it may also happen in case of partial or pro rata allotment of shares when the company retains excess amount received on application of shares in excess of allotment money.
Example -10:  (Calls-in-Arrears and Calls Paid in Advance both).
The Manu Ltd., with an authorised capital of 5,00,000 Equity Shares of ₹ 10 each,
issued 2,00,000 Equity Shares, payable
₹ 3 on application,
₹ 2 on allotment,
₹ 3 on first call an
₹ 2 on second and final call.
The amount due on allotment was received. On the first call being made, one shareholder holding 6,000 Equity Shares paid second and final call along with the first call while five shareholders with a total holding of 10,000 Equity Shares did not pay the first call on their Equity Shares. Company has not demanded the second and final call.
Pass Journal entries to record in the  Books of Mili Ltd. .
Solution-: