Midee Ltd. invited applications for issuing 27,000 shares of ₹ 100 each payable as follows:
₹ 50 $—$ per share on application;
₹ 10 $—$ per share on allotment; and
Balance $—$ on First and Final call.
Applications were received for 40,000 shares. Full allotment was made to the applicants of 7,000 shares. The remaining applicants were allotted 20,000 shares on pro rata basis. Excess money received on applications was adjusted towards allotment and call.
Asha, holding 600 shares was belonged to the category of applicants to whom full allotment was made ,paid the call money at the time of allotment . Ankur, who belonged to the category of applicants to whom shares were allotted on pro rata basis did not pay anything after application on his 200 shares . Ankur's shares were forfeited after the First and Final call. These shares were later reissued at ₹ 105 per share as fully paid-up.
Pass necessary journal entries in the books of Midee Ltd . for the above transactions, by opening Calls-in-Arrears and Calls-in-Advance Accounts wherever necessary.

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Solution

Journal

Date

Particulars

L.F.

Debit

Amount

(₹)

Credit

Amount

(₹)

Bank A/c (40,000 × 50)
Dr.

20,00,000

To Equity Share Application A/c

20,00,000

(Application money received)

Equity Share Application A/c
Dr.

20,00,000

To Equity Share Capital A/c(27,000 × 50)

13,50,000

To Calls in Advance A/c(13,000 × 50)

6,50,000

(Application money transferred)

Equity Share Allotment A/c (27,000 × 10)
Dr.

2,70,000

To Equity Share Capital A/c

2,70,000

(Allotment money due)

Bank A/c
Dr.

94,000

Calls in Advance A/c

2,00,000

To Equity Share Allotment A/c

2,70,000

To Calls–in–Advance A/c

24,000

(Allotment money received)

Equity Share First Call A/c (27,000 × 40)
Dr.

10,80,000

To Equity Share Capital A/c

10,80,000

(Call money due)

Bank A/c
Dr.

6,26,500

Calls–in–Advance A/c
Dr.

4,50,000

Calls–in–Arrears A/c
Dr.

3,500

To Equity Share First Call A/c

10,80,000

(Call money received)

Equity Share Capital A/c
Dr.

20,000

To Equity Share First Call A/c

3,500

To Equity Share Forfeiture A/c

16,500

(200 shares forfeited)

Bank A/c (200 × 105)
Dr.

21,000

To Equity Share Capital A/c

20,000

To Securities Premium A/c

1,000

(Forfeited shares re–issued at Rs 105 per share)

Equity Share Forfeiture A/c
Dr.

16,500

To Capital Reserve A/c

16,500

(Profit on re–issue transferred)

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Similar questions

Q. Midee Ltd. invited applications for issuing 27,000 shares of ₹ 100 each payable as follows:
₹ 50

—

per share on application;
₹ 10

—

per share on allotment; and
Balance

—

on First and Final call.
Applications were received for 40,000 shares. Full allotment was made to the applicants of 7,000 shares. The remaining applicants were allotted 20,000 shares on pro rata basis. Excess money received on applications was adjusted towards allotment and call.
Asha, holding 600 shares was belonged to the category of applicants to whom full allotment was made ,paid the call money at the time of allotment . Ankur, who belonged to the category of applicants to whom shares were allotted on pro rata basis did not pay anything after application on his 200 shares . Ankur's shares were forfeited after the First and Final call. These shares were later reissued at ₹ 105 per share as fully paid-up.
Pass necessary journal entries in the books of Midee Ltd . for the above transactions, by opening Calls-in-Arrears and Calls-in-Advance Accounts wherever necessary.

A Ltd. invited applications for issuing 1,00,000 shares of ₹ 10 each at a premium of ₹ 1 per share. The amount was payable as follows:

On Application	–	3 per share;
On Allotment	–	3 per share (including premium);
On First Call	–	3 per share;
On Second and Final Call	–	Balance amount.

Applications for 1,60,000 shares were received. Allotment was made on the following basis:

(i)	To applicants for 90,000 shares	–	40,000 shares;
(ii)	To applicants for 50,000 shares	–	40,000 shares;
(iii)	To applicants for 20,000 shares	–	Full shares.

Excess money paid on application is to be adjusted against the amount due on allotment and calls.

Rishabh, a shareholder, who applied for 1,500 shares and belonged to category (ii), did not pay allotment, first and second and final call money.

Another shareholder, Sudha, who applied for 1,800 shares and belonged to category (i), did not pay the first and second and final call money.

All the shares of Rishabh and Sudha were forfeited and were subsequently reissued at ₹ 7 per share fully paid.

Pass the necessary Journal entries in the books of A Ltd. Open Calls-in-Arrears Account and Calls-in-Advance Account wherever required.

Q. Raja Ltd. invited applications for issuing 50,000 Equity Shares of ₹ 10 each . The amount was payable as follows:

On application

—

₹ 3 per share,
On allotment

—

₹ 5 per share,
On first and final call

—

Balance.

Applications for 70,000 shares were received . Allotment was made to all applicants on pro rata basis. Excess money received on application was adjusted towards sums due on allotment . Ramesh, who had applied for 700 shares , did not pay the allotment money and on his failure to pay the allotment money his shares were forfeited. Afterwards , the first and the final call was made . Adhar, who had been allotted 500 shares, did not pay the first and final call . His shares were also forfeited . Out of the forfeited shares 900 shares were reissued at ₹ 8 per share as fully paid-up . The reissued shares included all the shares of Ramesh.
Pass necessary journal entries for the above transactions in the books of the company.

X Ltd., invited applicaions for issuing 50,000 equity shares fo Rs 10 each. The amount was payable as follows : On Application : Rs 2 per share, On Allotment : Rs 3 per share, On First Call Rs 3 per share, On Second and Final Call : Balance amount. Applications for 70,000 shares were received. Applications for 10,000 shares were rejected and the application money was refunded. Shares were allotted to the remaining applicants on pro-rata basis and excess money received with applications was transferred towards sums due on allotment and calls, if any. Gopal,who applied for 600 shares, paid his entire share money with application. Ghosh, who had applied for 6,000 shares, failed to pay the allotment money and his shares were immediately forfeited. These forfeited shares were re-issued to Sultan for Rs 20,000; Rs 4 per share paid up. The first call money and the second and final call money was called and duly received. Pass necessary Journal entries for the above transactions in the books of X Ltd. Open Calls-in -Advance Account and Calls-in-Arrears Account wherever necessary.

A Ltd. Invited applications for issuing 1,00,000 shares of Rs 10 each at a premium of Rs 1 per share. The amount was payable as follows : On Application : Rs 3 per share; On Allotment : Rs 3 per share (including premium); On First Call : Rs 3 per share on Second and Final Call : Balance amount.

Applications for 1,60,000 shares were received. Allotment was made on the following basis:

(i) To applicants for 90,000 shares : 40,000 shares.

(ii) To applicants for 50,000 shares : 40,000 shares.

(iii) To applicants for 20,000 shares : full shares.

Excess money paid on application is to be adjusted against the amount due on allotment and calls.

Rishabh, a shareholder, who applied for 1,500 shares and belonged to category (ii), did not pay allotment, first and second and final call money. Another shareolder, Sudha, who applied for 1,800 shares and belonged to category (i), did not pay the first and second and final call money. All the shares of Rishabh and Sudha were forfeited and were subsequently re-issued at Rs 7 per share fully paid. Pass the necessary Journal entries in the books of A Ltd. Open Call-in Arrears account and Call-in -Advance Account wherever required.

Q. XYZ Ltd. invited applications for issuing 50,000 Equity Shares of ₹10 each . The amount was payable as:

On application	$—$	₹ 3 per share,
On allotment	$—$	₹ 4 per share,
On first and final call	$—$	₹ 3 per share.

Applications were received for 75,000 shares and pro rata allotment was made as:
Applicants for 40,000 shares were allotted 30,000 shares on pro rata basis.
Applicants for 35,000 shares were allotted 30,000 shares on pro rata basis.
Ramu, to whom 1,200 shares were allotted out of the group applying for 40,000 shares, failed to pay the allotment money. His shares were forfeited immediately after allotment .
Shamu, who had applied for 700 shares out of the group applying for 35,000 shares , failed to pay the first and final call . His shares were also forfeited. Out of the forfeited shares, 1,000 shares were reissued @ Applicants for 40,000 shares were allotted 30,000 shares on pro rata basis. 8 per share as fully paid-up. The reissued shares included all the forfeited shares of Shamu.
Pass necessary Journal entries to record the above transactions.

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Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
	Bank A/c (40,000 × 50)	Dr.		20,00,000
	To Equity Share Application A/c				20,00,000
	(Application money received)

	Equity Share Application A/c	Dr.		20,00,000
	To Equity Share Capital A/c(27,000 × 50)				13,50,000
	To Calls in Advance A/c(13,000 × 50)				6,50,000
	(Application money transferred)

	Equity Share Allotment A/c (27,000 × 10)	Dr.		2,70,000
	To Equity Share Capital A/c				2,70,000
	(Allotment money due)

	Bank A/c	Dr.		94,000
	Calls in Advance A/c			2,00,000
	To Equity Share Allotment A/c				2,70,000
	To Calls–in–Advance A/c				24,000
	(Allotment money received)

	Equity Share First Call A/c (27,000 × 40)	Dr.		10,80,000
	To Equity Share Capital A/c				10,80,000
	(Call money due)

	Bank A/c	Dr.		6,26,500
	Calls–in–Advance A/c	Dr.		4,50,000
	Calls–in–Arrears A/c	Dr.		3,500
	To Equity Share First Call A/c				10,80,000
	(Call money received)

	Equity Share Capital A/c	Dr.		20,000
	To Equity Share First Call A/c				3,500
	To Equity Share Forfeiture A/c				16,500
	(200 shares forfeited)

	Bank A/c (200 × 105)	Dr.		21,000
	To Equity Share Capital A/c				20,000
	To Securities Premium A/c				1,000
	(Forfeited shares re–issued at Rs 105 per share)

	Equity Share Forfeiture A/c	Dr.		16,500
	To Capital Reserve A/c				16,500
	(Profit on re–issue transferred)