Question

Pawan Ltd. was registered with an authorised Capital of Rs 5,00,000 divided into shares of Rs 10 each. It purchased a Building from Y for Rs 2,00,000 and issued fully paid shares to Y for purchases consideration.It invited applications for the balance 30,000 shares payable as under:---- Rs 3 per share on Application; Rs 3 per share on Allotment; Rs 2 per share First Call; and Rs 2 on Final Call.

Ashok, who had been allotted 500 shares failed to pay both the Calls. His shares were forfeited and re-issued at Rs 9 per share to Hari, as fully paid up. Make neccessary entries in the Journal of the Company.

Answer 1

$\text{JOURNAL}$

$\begin{array}{cccccc}\text{Date}& \text{Particulars}& & \text{L.F}& \text{Dr (Rs)}& \text{Cr. (Rs)}\\ & \text{Buildings A/c}& \text{Dr.}& & 2,00,000& \\ & \text{To Vendors (Y)}& & & & 2,00,000\\ & \text{(Assets purchased)}& & & & \\ & \text{Vendors (Y)}& \text{Dr.}& & 2,00,000& \\ & \text{To Share Capital A/c}& & & & 2,00,000\\ & \text{(Purchase consideration discharged by shares)}& & & & \\ & \text{Bank A/c}& \text{Dr.}& & 90,000& \\ & \text{To Share Application A/c}& & & & 90,000\\ & \text{(Amount received on application)}& & & & \\ & \text{Share Application A/c}& \text{Dr.}& & 90,000& \\ & \text{To Share Capital A/c}& & & & 90,000\\ & \text{(Amount of share application transferred to share capital a/c)}& & & & \\ & \text{Bank A/c}& \text{Dr.}& & 90,000& \\ & \text{Share Allotment A/c}& & & & 90,000\\ & \text{(Amount received on allotment)}& & & & \\ & \text{Share Allotment A/c}& \text{Dr.}& & 90,000& \\ & \text{To Share Capital A/c}& & & & 90,000\\ & \text{(Allotment money transfer to share capital account)}& & & & \\ & \text{Bank A/c}& \text{Dr.}& & 59,000& \\ & \text{To Share First Call A/c}& & & & 59,000\\ & \text{(Amount received on first call on 29,500 shares @ Rs 2 per share)}& & & & \\ & \text{Share First Call A/c}& \text{Dr.}& & 60,000& \\ & \text{To Share Capital A/c}& & & & 60,000\\ & \text{(First call money transferred to share capital account)}& & & & \\ & \text{Bank A/c}& \text{Dr.}& & 59,000& \\ & \text{To Share Final Call A/c}& & & & 59,000\\ & \text{(Amount received on first call on 29,500 shares @ Rs 2 per share)}& & & & \\ & \text{Share Final Call A/c}& \text{Dr.}& & 60,000& \\ & \text{To Share Capital A/c}& & & & 60,000\\ & \text{(Final call money transferred to share capital account)}& & & & \\ & \text{Share Capital A/c}& \text{Dr.}& & 5,000& \\ & \text{To Share First Call A/c}& & & & 1,000\\ & \text{To Share Final Call A/c}& & & & 1,000\\ & \text{To Share Forefeiture A/c}& & & & 3,000\\ & \text{(500 shares of Ashok forfeited for non-payment of First}& & & & \\ & \text{Call and Final Call)}& & & & \\ & \text{Bank A/c}& \text{Dr.}& & 4,500& \\ & \text{Share Forefeiture A/c}& \text{Dr.}& & 500& \\ & \text{To Share Capital A/c}& & & & 5,000\\ & \text{(Re-issue of 500 shares @ Rs 9 per share)}& & & & \\ & \text{Share Forefeiture A/c}& & & 2,500& \\ & \text{To Capital Reserve A/c}& \text{Dr.}& & & 2,500\\ & \text{(Balance left in Share Forefeiture A/c Rs 3,000 - Rs 500=}& & & & \\ & \text{Rs 2,500 transferred to Capital Reserve A/c)}& & & & \end{array}$