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Question

Amisha Ltd inviting application for 40,000 shares of Rs 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.

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Solution

Books of Amisha Ltd.

Date

Particulars

L.F.

Debit

Amount

Rs

Credit

Amount

Rs

Bank A/c

Dr.

20,00,000

To Share Application A/c

20,00,000

(Share Application money received on 50,000 shares @ 40 per share)

Share Application A/c

Dr.

20,00,000

To Share Capital A/c

16,00,000

To Share Allotment A/c

4,00,000

(Share Application money adjusted)

Share Allotment A/c

Dr.

16,00,000

To Share Capital A/c

8,00,000

To Share Premium A/c

8,00,000

(Share Allotment money due including premium)

Bank A/c

Dr.

11,82,000

To Share Allotment A/c

11,82,000

(Share Allotment money received except 600 shares)

Share Capital A/c

Dr.

36,000

Share premium A/c

Dr.

12,000

To Share Allotment A/c

18,000

To Share Forfeiture A/c

30,000

(600 shares forfeited after allotment)

Share First Call A/c

Dr.

9,85,000

To Share Capital

9,85,000

(First Call money in due on 39,400 shares)

Bank A/c

Dr.

9,65,000

To Share First Call A/c

9,65,000

(First Call money received except 800 shares)

Share Second and Final Call A/c

Dr.

5,91,000

To Share Capital A/c

5,91,000

(Second and Final Call money due on 39,400 shares)

Bank A/c

Dr.

5,79,000

To Share Second and Final Call A/c

5,79,000

(Second and Final Call money received except 800 shares)

Share Capital A/c

Dr.

80,000

To Share First Call A/c

20,000

To Share Second & Final Call A/c

12,000

To Share Forfeiture A/c

48,000

(800 share forfeited)

Bank A/c

Dr.

1,02,000

Share Forfeiture A/c

Dr.

18,000

To Share Capital A/c

1,20,000

(Forfeited shares reissued 1,200 @ 85 per share)

Share Forfeiture A/c

Dr.

48,000

To Capital Reserve A/c

48,000

(Profit on 1,200 reissued shares are transfer to capital reserve

account)

Cash Book (Bank Column)

Dr.

Cr.

Date

Particulars

J.F.

Amount

Rs

Date

Particulars

J.F.

Amount

Rs

Share Application

20,00,000

Balance c/d

48,28,000

Share Allotment

11,82,000

Share First Call

9,65,000

Share Final Call

5,79,000

Share Capital

1,02,000

48,28,000

48,28,000

Working Notes:

2. Call in arrears by Rohit on allotment

Money received on Application

(750×40)

=

30,000

Less: Amount adjusted on Application

(600×40)

=

24,000

Amount adjusted on Allotment

6,000

3.

Money due on Allotment

(600×40)

24,000

Money adjusted

6,000

Balance due on Allotment

18,000

5. Profit on the forfeiture of 600 share of Rohit = Rs 30,000

Profit on the forfeiture of 600 share of Ashmita = Rs 36,000

Profit on forfeiture of 1200 shares (30,000 + 36,000)

=

66,000

Less: Loss on reissue of shares

=

18,000

Transfer to Capital Reserve

=

48,000

6. Balance in Share Forfeiture Account (48,000 – 36,000) = Rs 12,000


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Q.

R.K.Ltd., invited applications for issuing 80,000 equity shares of Rs 10 each at a premium of Rs 35 per share. The amount was payable as follows:
On Application Rs 8 (including Rs 5 premium) per share.
On Allotment Rs 12 (including Rs 10 premium) per share.

On First and Final Call Balance.

Application for 75,000 shares were received and allotment was made to all the applicants. Rahim, a shareholder who was allotted 3,000 shares failed to pay allotment money and his shares were immediately forfeited. Afterwards, the first and final call was made. Suhani who held 3,000 shares failed to pay the final call. Her shares were also forfeited. All the forfeited shares were re-issued for a sum of Rs 62,000 as fully paid up.

Pass the necessary Journal entries for the above transactions in the books of R.K.Ltd.

OR

Sargam Ltd., invited applications for issuing 80,000 equity shares of Rs 100 each at a premium. The amount was payable as follows :

On Application Rs 20 per share.

On Allotment Rs 60 (including premium) per share.

On First and Final Call Rs 40 per share.

Application for 1,20,000 shares were received. Allotment was made on pro-rata basis to all the applicants. Excess money received on applications was adjusted on sums due to allotment. Sitaram, who had applied for 6,000 shares failed to pay the allotment money and Harnam did not pay first and final call on 800 shares allotted to him. The shares of Sitaram and Harnam were forfeited. 4,200 of these shares were re-issued for Rs 100 per share as fully paid up. The re-issued shares included all the forfeited shares of Harnam.

Pass necessary Journal entries for the above transactions in the books of Sargam Ltd.

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