Question 51 Chapter 8 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 51 Chapter 8 of +2-Part-1

51. (Prorata Allotment/Forfeiture/Reissue) Z Ltd. invited applications for issuing 2,00,000equity shares of Rs. 25 per share. The amount was payable as follows:
On Application and allotment Rs. 10 per share Balance on first and final balance amount. Applicants for 2,50,000 shares were received. Applications for 25,000 shares were rejected and shares were allotted on pro-rata basis to the remaining applicants. All calls were made and were duly received except the first and final call on 2,000 shares allotted to Vijay. His shares were forfeited. The forfeited shares were reissued @ Rs. 30 per share fully paid up.
Pass necessary journal entries in the books of the company

The solution of Question 51 Chapter 8 of +2 Part-1: -

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Journal

Date	Particulars		L.F.	Debit	Credit
A)	Bank A/c( 2,50,000 X 10)	Dr.		25,00,000
	To Share Application Allotment A/c				25,00,000
	(Being the receipt of application money)
B)	Share Application A/c	Dr.		25,00,000
	To Share capital A/c				20,00,000
	To Share first & Final A/c				2,50,000
	To Bank A/c (25,000 X 10)				2,50,000
	(Being 2,00,000 shares allotted on pro-rata basis & money refunded on 25,000 rejected )
C)	Share final Call A/c	Dr.		30,00,000
	To Share capital A/c				30,00,000
	(Being final due on 2,00,000 shares @ Rs. 15 )
D)	Bank A/c	Dr.		27,22,500
	Calls in arrears A/c	Dr.		27,500
	To Share final A/c				27,50,000
	(Being amount received on final call )
E)	Share capital A/c	Dr.		50,000
	To Share Forfeited A/c				27,500
	To Calls in Arrears A/c				22,500
	(Being 2,000 shares fortified)
F)	Bank A/c	Dr.		60,000
	To Share capital A/c				50,000
	To Securities Premium A/c				10,000
	(Being 2,000 shares reissued)
G)	Share Fortified A/c	Dr.		22,500
	To Capital Reserve A/c				22,500
	(Being balance in share fortified transferred to capital reserve)

Working Notes:

Shares applied by Vijay = 2,25,000/2,00,000X2,000=2,250 shares

Application & Allotment Money received 2,250 X 10	22,500
Less : Application money adjusted on 2,000 shares X 10 )	20,000
Retained for call	2,500
Total final due (2,00,000 X 15 )	30,00,00
Less : Already Retained	2,50,000
Less : not Received from Vijay on call ( 2,000 X 15) – 2,500	27,500
Not Received on call	27,22,500

It all about Question 51 Chapter 8 of +2-Part-1, If you have any problem please comment below.

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