Amisha Ltd inviting application for 40,000 shares of 100 each at a premium of Rs. 20 per share payable on application; Rs. 40 on allotment; Rs. 40 (Including Premium) on first call Rs. 25 and, second and final call Rs. 15.
Application were received for 50,000 shares and allotment was made on pro-rata basis. Excess money on application was adjusted on sums due on allotment.
Rohit to whom 600 shares were allotted failed to pay the allotment money and his shares were forfeited after allotment. Ashmita, who applied for 1,000 shares failed to pay the two calls and his shares were forfeited after the second call. Of the shares forfeited, 1,200 shares were sold to Kapil for Rs. 85 per share as fully paid, the whole of Rohit's shares being included. Record necessary journal entries.


DateParticularsLFAmt.(Dr)mt.(Cr)(i)Bank A/cDr20,00,000  To Share Application A/c20,00,000(Share application money received on 50,000 shares @ 40 per share)                                                                           –––––––––––––––––––––––––––––––––––––––––––––(ii)Share Application A/cDr20,00,000  To Share Capital A/c(40,000×40)16,00,000  To Share Allotment A/c(10,000×40)4,00,000(Share application money adjusted)                                                                           –––––––––––––––––––––––––––––––––––––––––––––(iii)Bank A/c (Working Note) Dr11,82,000  To Share Allotment A/c11,82,000(Share allotment money receviedexcept 600 shares)                                                                           –––––––––––––––––––––––––––––––––––––––––––––(iv)Share Allotment A/cDr16,00,000  To Share Capital A/c(40,000×20)8,00,000  To Securities Premium A/c(40,000×20)8,00,000(Share allotment money includingpremium trasferred to capital and premium account)                                                                           –––––––––––––––––––––––––––––––––––––––––––––(v)Share Capital A/c (600×60)Dr36,000Share Premium A/c (600×20)12,000  To Share Allotment A/c (Working Note)18,000  To Share Forfeiture A/c (Working Note)30,000(600 shares forfeited after allotment)                                                                           –––––––––––––––––––––––––––––––––––––––––––––(vi)Bank A/c (38,600×25)Dr9,65,000   To Share First Call A/c9,65,000(First call money received except 800 shares)                                                                           –––––––––––––––––––––––––––––––––––––––––––––(vii)Share First Call A/cDr9,85,000  To Share Capital A/c (39,400×25)9,85,000(First call money transferred to share capital account)                                                                           –––––––––––––––––––––––––––––––––––––––––––––(viii)Bank A/c (38,600×15)Dr5,79,000  To Share Second and Final Call A/c5,79,000(Second and final call money recevied except800 shares)                                                                           –––––––––––––––––––––––––––––––––––––––––––––(ix)Share Second and Final Call A/cDr5,91,000    To Share Capital A/c(39,400×15)5,91,000(Second and final call money transferred toshare capital account)                                                                           –––––––––––––––––––––––––––––––––––––––––––––(x)Share Capital A/c (800×100)Dr80,000  To Share First Call A/c (800×25)20,000  To Share Second and Final Call A/c (800×15)12,000  To Share Forfeiture A/c (800×60)48,000(800 shares forfeited for non payment of twocalls)                                                                           –––––––––––––––––––––––––––––––––––––––––––––(xi)Bank A/c (1,200×85)Dr1,02,000Share Forfeiture A/c (1,200×15)Dr18,000  To Share Capital A/c (1,200×100)1,20,000(1200 shares reissued @ Rs 85 per share fullypaid-up)                                                                           –––––––––––––––––––––––––––––––––––––––––––––(xii)Share Forfeiture A/c (Working Note) Dr48,000  To Capital Reserve A/c48,000(Balance amount after reissue from share forfeitureaccount transferred to capital reserve)

Working Note:

(i) Calculation of Amount received on Allotment Number of shares applied by Rohit =Total shares appliedTotal shares alloted×Shared Allotted =50,00040,000×600 = 750 shares

Arrear of Rohit on Allotment Money received on application (750×40)=30,000(-) Money adjusted on application (600×40)=(24,000)––––––––Allotment advance      6,000Rohit money due on Allotment (600×40)     ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯24,000(-) Allotment advance      (6,000)––––––Rohit's arrear on allotment      18,000––––––Total Money to be received in AllotmentAllotment money transferred to share capital account (40,000×40)  16,00,000(-) Allotment advance on application   (4,00,000)––––––––––    12,00,000(-) Rohit's arrear of allotment      (18,000)––––––––Amount received on allotment   11,82,000–––––––––

(ii) Calculation of Capital Reserve:

(a) On Rohit's 600 Shares Reissued

Amount transferred to share forfeiture (750×40)=30,000(-) Amount adjusted on reissue (600×15)=  9,000––––Rohit's transfer to capital reserve   21,000––––––

(b) On 600 Shares of Ashmita Reissued
Number of share allotted

=Total shares allotedTotal shares applied×Shares applied =40,00050,000×1,000=800 shares

Amount transferred to share forfeiture on 600=36,000share forfeiture (600×600)(-) Amount adjusted on reissue 600 shares=(9,000)(600×15)Ashmita's transfer to capital reserve   ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯27,000––––––Hence total capital reserve=21,000+27,000 =Rs 48,000


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