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Pro-Rata Basis of Allotment

Modern Chemic...

Question

Modern Chemicals Co. Ltd. made an issue of 60,000 shares of Rs. 20 each payable as follows:
On application Rs. 5 per share
On allotment Rs. 5 per share
On first call Rs. 4 per share
On second call Rs. 3 per share
The company received applications for 65,000 shares of which applications for 5,000 shares were rejected and money refunded.
All the same shareholders paid up to second call except one shareholder, Mr. Bhupendra, the allotee of 100 shares, who did not pay the amount of the second call.
Give Journal Entries in the books of Modern Chemicals Co. Ltd.

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Solution

Date

Particulars

Amount (Dr.)

Amount (Cr.)

1.

Bank A/c

Dr.

325000

To Share application A/c

325000

(Being shares application money @ Rs. 5 per share received for 65000 shares)

2.

Share application A/c

Dr.

325000

To Bank A/c

25000

To Share Capital A/c

300000

(Being application money on 60000 shares transferred to share capital A/c and that of 5000 shares refunded)

3.

Share Allotment A/c

Dr.

300000

To Share Capital A/c

300000

(Being share allotment due)

4.

Bank A/c

Dr.

300000

To Share Allotment A/c

300000

(Being allotment money received)

5.

Share First Call A/c

Dr.

240000

To Share Capital A/c

240000

(Being share first call due)

6.

Bank A/c

Dr.

240000

To Share First Call A/c

240000

(Being first call received)

7.

Share second call A/c

Dr.

180000

To Share Capital A/c

180000

(Being second call due)

8.

Bank A/c

Dr.

179700

Calls-in arrears A/c

Dr.

300

To Share second call A/c

180000

(Being second call money received except for 100 shares)

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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.

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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:

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Bhagwati Ltd. invited applications for issuing 2,00,000 equity shares of Rs 10 each. The amount were payable as follows :

On Application --Rs 3 per share.

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On first and final call -- Rs 2 per share.

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Pass necessary journal entries to record the above transactions in the books of Bhagwati Ltd.

(a) A company forfeited 200, shares of Rs 20 each, Rs 15 per share called up on which Rs 10 per share had been paid Directors reissued all the forfeited shares to B as Rs 15 per share paid up, for a payment of Rs 10 each . Give journal entries in the books of the company for forfeiture and re-issue of shares.

(b) A Ltd. forfeited 100 equity shares of the face value of Rs 10 each, for the non-payment of first call of Rs 2 per share. Rs 6 per share had already been called and paid. These shares were subsequently re-issued as fully paid at the rate of Rs 7 per share. Give journal entries in the books of the company for forfeiture and re-issue of shares.

Q. JS Ltd. invited applications for issuing

80, 000

equity shares of Rs.

10

each at a premium of Rs.

6

per share. The amount was payable as follows:
On application Rs.

4

per share (including premium Rs.

1

per share)
On Allotment Rs.

6

per share (including premium Rs.

3

per share)
On First and Final Call Balance.
Applications for

1, 60, 000

shares were received. Applications for

40, 000

shares were rejected and application money refunded. Shares were allotted on pro-rata basis to the remaining applicants. Excess money received with applications was adjusted towards sums due on allotment. Raman holding

400

shares failed to pay the allotment money. His shares were forfeited immediately after allotment. Afterwards the final call was made. Veer who had applied for

1, 200

shares failed to pay the final call. His shares were also forfeited. Out of the forfeited shares

500

shares were re-issued at Rs.

8

per share fully paid-up. The re-issued shares included all the forfeited shares of Raman.
Pass necessary journal entries for the above transactions in the books of J.S. Ltd.

Q. AB Ltd. invited applications for issuing 75,000 equity shares of Rs 100 each at a premium of Rs 30 per share. The amount way payable as follows:
On Application and Allotment - Rs 85 per share (including premium)
On First and Final call - the balance Amount Applications for 1,27,500 shares were received. Applications for 27,500 shares were rejected and share were allotted on pro-rata basis to the remaining applicants. Excess money received on application and allotment was adjusted towards sums due to first and final call. The calls were made. A shareholder, who applied for 1,000 shares, failed to pay the first and final call money. His shares were forfeited. All the forfeited shares were reissued at Rs 150 per share fully paid up.
Pass necessary journal entries for the above transactions in the books of AB Ltd.

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Date	Particulars		Amount (Dr.)	Amount (Cr.)
1.	Bank A/c	Dr.	325000
	To Share application A/c			325000
	(Being shares application money @ Rs. 5 per share received for 65000 shares)
2.	Share application A/c	Dr.	325000
	To Bank A/c			25000
	To Share Capital A/c			300000
	(Being application money on 60000 shares transferred to share capital A/c and that of 5000 shares refunded)
3.	Share Allotment A/c	Dr.	300000
	To Share Capital A/c			300000
	(Being share allotment due)
4.	Bank A/c	Dr.	300000
	To Share Allotment A/c			300000
	(Being allotment money received)
5.	Share First Call A/c	Dr.	240000
	To Share Capital A/c			240000
	(Being share first call due)
6.	Bank A/c	Dr.	240000
	To Share First Call A/c			240000
	(Being first call received)
7.	Share second call A/c	Dr.	180000
	To Share Capital A/c			180000
	(Being second call due)
8.	Bank A/c	Dr.	179700
	Calls-in arrears A/c	Dr.	300
	To Share second call A/c			180000
	(Being second call money received except for 100 shares)