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Question No 69 Chapter 1 - UNIMAX Class 12 Part 2 - 2021
Amrit Ltd. invited applications for 30,000 equity shares of ₹ 10 each issued at premium of ₹ 3 per share, payable as follows: ₹ 3 on application, ₹ 6 o n application, ₹ 6 on allotment including premium ₹ 2 on first call and ₹ 2 on final all. Application were received for 40,000 shares. Application for 4,000 shares were rejected and pro rata allotment was made to the remaining applicants. Mr. A, holder of 600 shares, failed to pay allotment and on his subsequent failure to pay first call, his shares were forfeited. Mr. B holder of 400 shares, failed to pay two calls. His shares were forfeited, later on 800 shares (including 600 shares of A), were reissued to Mr. C as fully paid at ₹ 11 per share.
Pass necessary journal entries in the books of Amrit Ltd
| Date | Particulars |
L.F. | Debit | Credit | |
|---|---|---|---|---|---|
| Bank A/c | Dr. | 1,20,000 | |||
| To share application A/c | 1,20,000 | ||||
| (Being share application money received on 40,000 shares @ ₹ 3 each) | |||||
| Share application A/c | Dr. | 1,20,000 | |||
| To share capital A/c | 90,000 | ||||
| To share allotment A/c | 18,000 | ||||
| To bank A/c | 12,000 | ||||
| (Being share application a/c closed after adjusting excess amount received on allotment and balance refunded) | |||||
| Shares allotment A/c | Dr. | 1,80,000 | |||
| To shares capital A/c | 90,000 | ||||
| To securities premium A/c | 90,000 | ||||
| (Being allotment money due on 30000 shares @ ₹ 6 each) | |||||
| Bank A/c | Dr. | 1,58,760 | |||
| To shares allotment A/c | 1,58,760 | ||||
| (Being allotment money received) | |||||
| Share first call A/c | Dr. | 60,000 | |||
| To shares capital A/c | 60,000 | ||||
| (Being first call money due on 30000 shares @ ₹ 2 each) | |||||
| Bank A/c | Dr. | 58,000 | |||
| To share first call A/c | 58,000 | ||||
| (Being share first call money received with the exception of 1000 shares) | |||||
| Share capital A/c | Dr. | 4800 | |||
| Securities premium A/c | Dr. | 1800 | |||
| To share first call A/c | 1200 | ||||
| To share forfeited A/c | 2,160 | ||||
| To share allotment A/c | 3,240 | ||||
| (Being 600 shares of A forfeited due to for non-payment of allotment and first call) | |||||
| Share second & final call A/c | Dr. | 58,000 | |||
| To share capital A/c | 58,000 | ||||
| (Being share second & final call money due on 29,400 shares) | |||||
| Bank A/c | Dr. | 58,000 | |||
| To share second & final call A/c | 58,000 | ||||
| (Being share second & final call money received with the exception of 400 shares) | |||||
| Equity share capital A/c | Dr. | 4,000 | |||
| To share first call A/c | 800 | ||||
| To share second & final call A/c | 800 | ||||
| To share forfeited A/c | 24,000 | ||||
| (Being 400 shares of Mr. B forfeited due to non-payment of call) | |||||
| Bank A/c | Dr. | 8,800 | |||
| To Equity share capital A/c | 8,800 | ||||
| To Securities premium A/c | 800 | ||||
| (Being 800 share reissued @ ₹ 11 each) | |||||
| Share forfeited A/c | Dr. | 3,360 | |||
| To capital reserve A/c | 3,360 | ||||
| (Being balance of share forfeited a/c transferred to capital reserve A/c) | |||||
Working Note:
| Shares applied | Shares allotted | |
| Lot 1 | 4,000 | Nil |
| Lot 2 | 36,000 | 30,000 |
| 40,000 | 30,000 |
1 Table showing adjustment of excess amount received on application.
| Lot 1 | Lot 2 | total | |
| No. of shares applied | 4,000 | 36,000 | 40,000 |
| Less: no. of shares allotted | Nil | 30,000 | 30,000 |
| Over subscription | 4,000 | 6000 | 10,000 |
| ₹ | ₹ | ₹ | |
| Excess amount received on application @ ₹ 3 each | 12,000 | 18,000 | 30,000 |
| Less: amount adjusted on allotment @ ₹ 6 each | 18,000 | 18,000 | 20000 |
| Refunded to be made | 12,000 | Nil | 12,000 |
2 Calculation of unpaid amount on A’s shares on allotment.
| No. of shares applied by A (600*6/5) | 720 shares |
| ₹ | |
| Amount received on application from A (720*3) | 2,160 |
| Less: actual application amount on 600 shares allotted to him (600*3) | 1800 |
| Excess Amount received to be adjusted on allotment | 360 |
| ₹ | |
| Amount due on allotment from A (600*6) | 3,600 |
| Less: amount already received now to be adjusted | 360 |
| Unpaid amount from A on allotment | 3240 |
3 Net Amount received on allotment
| ₹ | |
| Total amount due on allotment 30,000 shares | 1,80,0000 |
| Less: amount already adjusted an allotment | 18,000 |
| 16,200 | |
| Less: unpaid amount on Sunder's shares | 3240 |
| Net amount received on allotment | 15,8760 |
4 Calculation of amount to be transferred to Capital Reserve
| ₹ | ₹ | |
| Amount forfeited on A’s 600 shares | 2,160 | |
| Less: Discount on reissue | Nil | 2,160 |
| Amount forfeited on 200 shares of B reissued | 1200 | |
| Less discount on reissued of shares | Nil | 1200 |
| Capital reserve | 3,360 |
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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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