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Question 47 Chapter 8 of +2-Part-1
47. (Prorata Allotment/Forfeiture/Reissue) TCS Ltd. offered at par 10,000 shares of RS. 10 each for public subscription payable as follows:
on application Rs. 3
on allotment Rs. 2
on first call Rs. 3
on final call Rs. 2
Public applied for 13,000 shares. Allotment was made prorata to the applicants of 12,000shares, application money on 1,000 shares being refunded. All the shareholders paid the amount due on allotment except Rakesh, the allotted of 200 shares. His shares were forfeited. First call was then made. Forfeited shares were re-issued @ Rs. 9 per share treated as Rs. 8 per share called up.
You are required to show entries in t he cash book and Journal.
| Date | Particulars |
L.F. | Debit | Credit | |
|---|---|---|---|---|---|
| A) | Share Application A/c | Dr. | 36,000 | ||
| To Share capital A/c | 30,000 | ||||
| To Share allotment A/c | 6,000 | ||||
| (Being allotment made ) | |||||
| B) | Share allotment A/c | Dr. | 20,000 | ||
| To Share capital A/c | 20,000 | ||||
| (Being amount due on allotment ) | |||||
| C) | Calls in arrears A/c | Dr. | 280 | ||
| To Share allotment A/c | 280 | ||||
| (Being amount not received on allotment) | |||||
| D) | Share capital A/c | Dr. | 1,000 | ||
| To Share Forfeited A/c | 720 | ||||
| To Calls in Arrears A/c | 280 | ||||
| (Being 200 shares fortified) | |||||
| E) | Share first Call A/c | Dr. | 29,400 | ||
| To Share capital A/c | 29,400 | ||||
| (Being amount due on first call) | |||||
| F) | Share Fortified A/c | Dr. | 720 | ||
| To Capital Reserve A/c | 720 | ||||
| (Being balance in share fortified transferred to capital reserve) | |||||
| Particulars | Rs. | Particulars | Rs. |
|---|---|---|---|
| To Share Application A/c | 39,000 | By Share Application A/c | 3,000 |
| To Share Allotment A/c | 13,720 | By Balance c/d | 80,320 |
| To Share First call A/c | 29,400 | ||
| To Share Capital A/c | 1,600 | ||
| To Secruity premium reserve A/c | 200 | ||
| 83,920 | 83,920 |
| Amount not received on allotment | ||
| Due from Rakesh 200 X 2 | 400 | |
| Less : Already received | ||
| (240 X 3) – (200X3) | 120 | |
| Calls in arrears | 280 | |
| Total amount due | 20,000 | |
| Less : Excess Received on application | 6,000 | |
| Less : not received | 280 | 6,280 |
| 13,720 |
It all about Question 47 Chapter 8 of +2-Part-1, If you have any problem please comment below.
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Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
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