Question

X LTd. issued 8,000 shares of Rs 100 each at a premium of Rs 40 per share. Amount was payable as follows:

$\begin{array}{cc}& \text{Rs.}\\ \text{On application}& 20\text{(including premium Rs 10 per share)}\\ \text{On allotment}& 50\text{(including premium Rs 30 per share)}\\ \text{On first call}& 30\\ \text{On second and final call}& 40\end{array}$

Applications were received for 7,500 shares and all were aceepted. All money was received except:

(i) Ashwin, holding 100 shares, failed to pay allotment money and his shares were forfeited after allotment.

(ii) Monika, holding 200 shares, failed to pay first call money and her shares were forfeited after first call.

(iii) Ruchi, holding 300 shares, failed to pay second call money and her shares were forfeited.

All the forfeited shares were reissued at a discount of 5% as fully paid-up.

Pass the necessary journal entries in the books of X Ltd.

Answer 1

JOURNAL

$\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}& & & & 75,000\\ & \text{To Securities Premium Reserve A/c}& & & & 75,000\\ & \text{(Application money transferred)}& & & & \\ & \text{Bank A/c}& \text{Dr.}& & 3,70,000& \\ & \text{Calls in Arrears A/c}& \text{Dr.}& & 5,000& \\ & \text{To Share Allotment A/c}& & & & 3,75,000\\ & \text{(Allotment money received on 7,400 shares)}& & & & \\ & \text{Share Allotment A/c}& \text{Dr.}& & 3,75,000& \\ & \text{To Share Capital A/c}& & & & 1,50,000\\ & \text{To Securities Premium Reserve A/c}& & & & 2,25,000\\ & \text{(Application money due on 7,500 shares)}& & & & \\ & \text{Share Capital A/c}(100\times \text{Rs 30})& \text{Dr.}& & 3,000& \\ & \text{Securities Premium Reserve}(100\times \text{Rs 30})& \text{Dr.}& & 3,000& \\ & \text{To Share Allotment A/c}(100\times \text{Rs 50})& & & & 5,000\\ & \text{To Share Forfeiture A/c}(100\times \text{Rs 10})& & & & 1,000\\ & \text{(100 shares forfeited)}& & & & \\ & \text{Bank A/c}& \text{Dr.}& & 2,07,000& \\ & \text{Calls in Arrears A/c}& \text{Dr.}& & 6,000& \\ & \text{Share First Call A/c}& & & & 2,22,000\\ & \text{(Share first call money received on 6,900 shares)}& & & & \\ & \text{Share First Call A/c}(7,400\times \text{Rs 30})& \text{Dr.}& & 2,22,000& \\ & \text{To Share Capital A/c}& & & & 2,22,000\\ & \text{(Share first call money due)}& & & & \\ & \text{Share Capital A/c}(200\times \text{Rs 60})& \text{Dr.}& & 12,000& \\ & \text{To Share First Call A/c}(200\times \text{Rs 30})& & & & 6,000\\ & \text{To Share Forfeiture A/c}(200\times \text{Rs 30})& & & & 6,000\\ & \text{(200 shares forfeited)}& & & & \\ & \text{Bank A/c}& \text{Dr.}& & 2,76,000& \\ & \text{Calls in Arrears A/c}& \text{Dr.}& & 12,000& \\ & \text{To Share Second and Final Call A/c}& & & & 2,88,000\\ & \text{(Share second call money received on 6,900 shares)}& & & & \\ & \text{Share Second and Final Call A/c}(7,200\times \text{Rs 40})& \text{Dr.}& & 2,88,000& \\ & \text{To Share Capital A/c}& & & & 2,88,000\\ & \text{(Share second call money due)}& & & & \\ & \text{Share Capital A/c}(300\times \text{Rs 100})& \text{Dr.}& & 30,000& \\ & \text{To Second and Final Call A/c}(300\times \text{Rs 40})& & & & 12,000\\ & \text{To Share Forfeiture A/c}(300\times \text{Rs 60})& & & & 18,000\\ & \text{(300 shares forfeited)}& & & & \\ & \text{Bank A/c}(600\times \text{Rs 95})& \text{Dr.}& & 57,000& \\ & \text{Share Forfeiture A/c}(600\times \text{Rs 5})& \text{Dr.}& & 3,000& \\ & \text{To Share Capital A/c}(600\times \text{Rs 100})& & & & 60,000\\ & \text{(Forfeited shares reissued)}& & & & \\ & {\text{Share Forfeiture A/c}}^{\left(1\right)}& \text{Dr.}& & 15,000& \\ & \text{To Capital Reserve A/c}& & & & 15,000\\ & \text{(Balance of share forfeiture transferred to capital reserve)}& & & & \end{array}$

Note (1) :

$\begin{array}{cc}& \text{Rs.}\\ \text{Total of Share Forfeiture Account (1,000+6,000+18,000)}& 16,000\\ \text{Less: Loss in Reissue}& 3,000\\ \text{Amount transferred to Capital Reserve}& \overline{\underset{–}{\underset{–}{15,000}}}\end{array}$