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Standard XII
Accountancy
Revaluation of Assets (Retirement)
PRACTICAL PRO...
Question

PRACTICAL PROBLEMS

(Issue at premium and calls in arrears)

Hindusthan Petroleum Ltd., invited application for 40,000 Equity shares of Rs 100 each payable as under including 20% premium:

On Application : Rs 30 On Allotment : Rs 40 (including premium)
On First Call : Rs 20 On Final Call : Rs 30

All the shares were applied for and also allotted. One share holder who was allotted 500 shares failed to pay first and final call.

Record the above transactions in the journal of the company.

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Solution

Books of Hindusthan Petroleum Ltd.
Journal Entry
Date
Particulars
L.F.
Debit Amount
Rs
Credit Amount
Rs
Bank A/c
Dr.
12,00,000
To Equity Share Application A/c
12,00,000
(Share application received on 40,000 shares of Rs 30 each)
Equity Share Application A/c
Dr.
12,00,000
To Equity Share Capital A/c
12,00,000
(Share application transferred to Share Allotment)
Equity Share Allotment A/c
Dr.
16,00,000
To Equity Share Capital A/c
8,00,000
To Securities Premium A/c
8,00,000
[Share allotment due on 40,000 shares of Rs 40 each (including Premium of 20%)]
Bank A/c
Dr.
16,00,000
To Equity Share Allotment A/c
16,00,000
(Share application received)
Equity Share First Call A/c
Dr.
8,00,000
To Equity Share Capital A/c
8,00,000
(Share first call due on 40,000 shares of Rs 20 each)
Bank A/c
Dr.
7,90,000
Calls-in-Arrears A/c
Dr.
10,000
To Equity Share First Call A/c
8,00,000
(Share first call received on 39,500 shares of Rs 20 each)
Equity Share Final Call A/c
Dr.
12,00,000
To Equity Share Capital A/c
12,00,000
(Share final call due on 40,000 shares of Rs 30 each)
Bank A/c
Dr.
11,85,000
Calla-in-Arrears
15,000
To Equity Share Final Call A/c
12,00,000
(Share first call received on 39,500 shares of Rs 30 each)

Working Notes:


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Q.

PRACTICAL PROBLEMS

(Forfeiture of shares issued at premium)

The Century Ltd. issued 8,000 shares of Rs 100 at a premium of 10% payable as under-

On Application - Rs 25 On Allotment - Rs 40 (including premium)
On First Call - Rs 20 On Second Call - Rs 25

Company called up allotment and both the calls which were duly received except Ramesh to whom 500 shares were allotted failed to pay allotment and calls.

Prepare Journal of Century Ltd.

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.

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

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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