Question

S Ltd issued 5,000 shares of Rs 100 each at a premium of Rs 10 each payable as follows:

$\begin{array}{cc}\text{On Application}& \text{Rs 50}\\ \text{On Allotment}& \text{Rs 40 (including premium)}\\ \text{On First and Final Call}& \text{Rs 40}\end{array}$

All the shares were applied for and instalments received on due dates with the exception of the Allotment and First & Final call on 100 shares; these shares were forfeited and re-issued as fully paid at Rs 105 per share.

Pass necessary Journal Entries in the books of the Company.

Answer 1

JOURNAL OF S LTD.

$\begin{array}{cccccc}\text{Date}& \text{Particulars}& & \text{L.F}& \text{Dr (Rs)}& \text{Cr. (Rs)}\\ & \text{Bank A/c}& \text{Dr.}& & 1,50,000& \\ & \text{To Share Application A/c}& & & & 1,50,000\\ & \text{(Application money received)}& & & & \\ & \text{Share Application A/c}& \text{Dr.}& & 1,50,000& \\ & \text{To Share Capital A/c}& & & & 1,50,000\\ & \text{(Transfer of Application money to Share Capital A/c)}& & & & \\ & \text{Bank A/c}& \text{Dr.}& & 1,96,000& \\ & \text{Calls in Arrears A/c}& \text{Dr.}& & 4,000& \\ & \text{To Share Allotment A/c}& & & & 2,00,000\\ & \text{(Amount received on Allotment on 4,900 shares)}& & & & \\ & \text{Share Allotment A/c}& \text{Dr.}& & 2,00,000& \\ & \text{To Share Capital A/c}& & & & 1,50,000\\ & \text{To Securities Premium Reserve A/c}& & & & 50,000\\ & \text{(Allotment due)}& & & & \\ & \text{Bank A/c}& \text{Dr.}& & 1,96,000& \\ & \text{Calls in Arrears A/c}& \text{Dr.}& & 4,000& \\ & \text{To Share First and Final Call A/c}& & & & 2,00,000\\ & \text{(Amount received on First and Final Call on 4,900 shares)}& & & & \\ & \text{Share First and Final Call A/c}& \text{Dr.}& & 2,00,000& \\ & \text{To Share Capital A/c}& & & & 2,00,00\\ & \text{(First and Final Call due)}& & & & \\ & \text{Share Capital A/c}& \text{Dr.}& & 10,000& \\ & {\text{Securities Premium Reserve A/c}}^{\left(1\right)}& \text{Dr.}& & 1,000& \\ & \text{To Share Allotment A/c}& & & & 4,000\\ & \text{To Share First and Final Call A/c}& & & & 4,000\\ & \text{To Share Forfeiture A/c}& & & & 3,000\\ & \text{(100 shares forfeited for non-payment of Allotment}& & & & \\ & \text{and First and Final Call money)}& & & & \\ & \text{Bank A/c}& \text{Dr.}& & 10,500& \\ & \text{To Share Capital A/c}& & & & 10,000\\ & \text{To Securities Premium Reserve A/c}& & & & 500\\ & \text{(100 shares re-issued at 105 per share)}& & & & \\ & \text{Share Forfeiture A/c}& \text{Dr.}& & 3,000& \\ & \text{To Capital Reserve A/c}& & & & 3,000\\ & \text{(Balance of Forfeiture A/c transferred to Capital Reserve A/c)}& & & & \end{array}$