Question

Dogra Ltd. had an authorised capital of 1,00,00,000 divided into equity shares of Rs 100 each. The company offered 84,000 shares to the public at premium. The amount was payable as follows:

On Application Rs 30 per shares.

On Allotment Rs 40 per share (including premium).

On First and Final Call Rs 50 per share.

Applications were received for 80,000 shares. All sums were duly received except the following : Lakhan, a holder of 200 shares did not pay allotment and call money. Paras, a holder of 400 shares did not pay call money.

The company forfeited the shares of Lakhan and Paras. Subsequently, the forfeited shares were re-issued for Rs 80 per share fully paid up. Show the entries for the transaction in the Cash Book and Journal of the company.

OR

Kaya Fab. Ltd. issued 1,00,000 equity shares of Rs 10 each payable as Rs 2 on application, Rs 4 on allotment and Rs 2 each on first and final call. Applications were received for 1,50,000 shares. Applicants of 50,000 shares were sent letters of regret and application money was refunded.

Madhur, a holder of 3,000 shares failed to pay allotment money which he paid along with the first call. Rohan, a shareholder holds 700 shares paid both the calls along with allotment. Sohan, a holder of 1,000 shares did not pay the first call and the final call. His shares were forfeited. The forfeited shares were re-issued at Rs 11 per shares as fully paid up.

Pass necessary Journal entries for the above transactions in the Books of the Company.

Answer 1

JOURNAL OF DOGRA LTD
$\begin{array}{cccccc}\text{Date}& \text{Particulars}& & \text{L.F.}& \text{Debit}& \text{Credit}\\ & & & & \text{(Rs)}& \text{(Rs)}\\ & \text{Shares Application A/c}(80,000\times 30)& \text{Dr.}& & 24,00,000& \\ & \text{To Share Capital A/c}& & & & 24,00,000\\ & \text{(Being the application money transferred to share capital}& & & & \\ & \underset{–}{\text{A/c)}}& & & & \\ & \text{Share Allotment A/c}(80,000\times 40)& \text{Dr.}& & 32,00,000& \\ & \text{To Share Capital A/c}(80,000\times 20)& & & & 16,00,000\\ & \text{To Security Preminum Reserve A/c}(80,000\times 20)& & & & 16,00,000\\ & \underset{–}{\text{(Being the allotment money due)}}& & & & \\ & \text{Share First}\&\text{Final Call A/c}(80,000\times 50)& \text{Dr.}& & 40,00,000& \\ & \text{To Share Capital A/c}& & & & 40,00,000\\ & \underset{–}{\text{(Being the first and final call money due on 80,000 shares)}}& & & & \\ & \text{Share Capital A/c}(200\times 100)& \text{Dr.}& & 20,000& \\ & \text{Security Premium Reserve A/c}(200\times 20)& \text{Dr.}& & 4,000& \\ & \text{To Forfeited Shares A/c}(200\times 30)& & & & 6,000\\ & \text{To Share Allotment A/c}(200\times 40)& & & & 8,000\\ & \text{To Share First and Final Call A/c}(200\times 50)& & & & 10,000\\ & \text{(Being 200 shares of Lakhan forfeited for non-payment of}& & & & \\ & \underset{–}{\text{allotment and call money)}}& & & & \\ & \text{Share Capital A/c}(400\times 100)& \text{Dr.}& & 40,000& \\ & \text{To Forfeited Shares A/c}(400\times 50)& & & & 20,000\\ & \text{To Shares First and Final Call A/c}& & & & 20,000\\ & \text{(Being 400 shares of Paras forfeited for non-payment of}& & & & \\ & \underset{–}{\text{call money)}}& & & & \\ & \text{Forfeited Shares A/c}& \text{Dr.}& & 12,000& \\ & \text{To Share Capital A/c}& & & & 12,000\\ & \text{(Being 600 forfeited shares re-issued at a discount of}& & & & \\ & \underset{–}{\text{(Rs 20)}}& & & & \\ & \text{Forfeited Shares A/c}(6,000+20,000-12,000)\text{Dr.}& & & 14,000& \\ & \text{To Capital Reserve A/c}& & & & 14,000\\ & \text{(Being profit on re-issue of 600 shares transferred to}& & & & \\ & \text{Capital Reserve)}& & & & \end{array}$

Dr. CASH / BANK ACCOUNT Cr.
$\begin{array}{cccc}\text{Particulars}& \text{Amount}& \text{Particulars}& \text{Amount}\\ & \text{(Rs)}& & \text{(Rs)}\\ \text{To Equity Share Application A/c}& 24,00,000& \text{By Balance c/d}& 96,10,000\\ (80,000\times 30)& & & \\ \text{To Equity Share Allotment A/c}& 31,92,000& & \\ (79,800\times 400)& & & \\ \text{Equity Share First and Final Call A/c}& 39,70,000& & \\ (79,400\times 50)& & & \\ \text{To Equity Share Capital A/c}(600\times 80)& 48,000& & \\ & \overline{96,10,000}& & \overline{96,10,000}\end{array}$

OR

JOURNAL OF KAYA FAB. LTD.
$\begin{array}{cccccc}\text{Date}& \text{Particulars}& & \text{L.F.}& \text{Debit}& \text{Credit}\\ & & & \text{(Rs)}& \text{(Rs)}& \\ & \text{Bank A/c}& \text{Dr.}& & 3,00,000& \\ & \text{To Share Application A/c}& & & & 3,00,000\\ & \text{(Being the application money @ Rs 2 received on 1,50,000}& & & & \\ & \underset{–}{\text{shares)}}& & & & \\ & \text{Share Application A/c}& \text{Dr.}& & 3,00,000& \\ & \text{To Share Capital A/c}(1,00,000\times 2)& & & & 2,00,000\\ & \text{To Bank A/c}(50,000\times 2)& & & & 1,00,000\\ & \underset{–}{\text{(Being application money adjusted and surplus refunded)}}& & & & \\ & \text{Share Allotment A/c}\text{Dr.}& & & 4,00,000& \\ & \text{To Share Capital A/c}& & & & 4,00,000\\ & \underset{–}{\text{(Being allotment money due)}}& & & & \\ & \text{Bank A/c}& \text{Dr.}& & 3,90,800& \\ & \text{To Share allotment A/c}& & & & 2,88,000\\ & \text{To Calls in Advance A/c}& & & & 2,800\\ & \text{(Being the allotment money received except for 3,000 shares}& & & & \\ & \underset{–}{\text{and calls in advance received for 700 shares})}& & & & \\ & \text{Shares First Call A/c}(1,00,000\times 2)& \text{Dr.}& & 2,00,000& \\ & \text{To Share Capital A/c}& & & & 2,00,000\\ & \underset{–}{\text{(Being first call money due)}}& & & & \\ & \text{Bank A/c}& \text{Dr.}& & 2,08,600& \\ & [2,00,000+12,000-1,400\text{calls in advance}-2,000\text{(arrear)}]& & & & \\ & \text{Calls in Advance A/c}& \text{Dr.}& & 1,400& \\ & \text{To Share First Call A/c}& & & & 1,98,000\\ & \text{To Share Allotment A/c}& & & & 12,000\\ & \text{(Being the first call money received except on 1,000 shares}& & & & \\ & \underset{–}{\text{and calls in advance adjusted towards first call)}}& & & & \\ & \text{Share Final Call A/c}(1,00,000\times 2)& \text{Dr.}& & 2,00,000& \\ & \text{To Share Capital A/c}& & & & 2,00,000\\ & \underset{–}{\text{(Being the final call due)}}& & & & \\ & \text{Bank A/c}& \text{Dr.}& & 1,96,600& \\ & \text{Calls in Advance A/c}& \text{Dr.}& & 1,400& \\ & \text{To Share Final Call A/c}& & & & 1,98,000\\ & \text{(Being final call money received except on 1,000 shares and}& & & & \\ & \underset{–}{\text{call in advance adjusted)}}& & & & \\ & \text{Share Capital A/c}(1,000\times 10)& \text{Dr.}& & 10,000& \\ & \text{To Forfeited Shares A/c}(1,000\times 6)& & & & 6,000\\ & \text{To Share First call A/c}(1,000\times 2)& & & & 2,000\\ & \text{To Share Final Call A/c}(1,000\times 2)& & & & 2,000\\ & \text{(Being 1,000 shares forfeited for non-payment of call}& & & & \\ & \underset{–}{\text{money)}}& & & & \\ & \text{Bank A/c}& \text{Dr.}& & 11,000& \\ & \text{To Share Capital A/c}& & & & 10,000\\ & \text{To Security Preminum Reserve A/c}& & & & 1,000\\ & \text{(Being forfeited shares reissued at Rs 11 per share as fully}& & & & \\ & \underset{–}{\text{paid)}}& & & & \\ & \text{Forfeited Shares A/c}& \text{Dr.}& & 6,000& \\ & \text{To Capital Reserve A/c}& & & & 6,000\\ & \text{(Being profit on re-issue of forfeited shares transferred to Capital Reserve)}& & & & \end{array}$