Question no 70 Chapter 1- Class 12 Part 2 Unimax

Question no 70 Chapter 1- Class 12 Part 2 Unimax

Surindra Ltd. invited application for issuing 2,00,000 equity shares of ₹ 30 each at a premium of ₹ 6 per share. The amount was payable as follows:

On application	₹ 4 per share (including 1 premium)
On allotment	₹ 6 per share (including 3 premium)
On first & final call	Balance

Application for 3,60,000 shares were received. Application for 60,000 were rejected allotted on pro-rata basis to the remaining applicants. Excess money received with application was adjusted towards sums due on allotment. Ravinder holding 800 shares, failed to pay the allotment money. His shares were forfeited immediately after allotment. Afterwards the final call was made. Harinder who applied for 1,200 shares failed to pay the final call. These shares were also forfeited. Out of the forfeited shares 1,000 shares were reissued at ₹ 8 per share fully paid up. The reissued shares included all the forfeited shares of Ravinder.
Pass necessary journal entries.

The solution of Question no 70 Chapter 1- Class 12 Part 2 Unimax: -

Journal
 Books of Sakshi

Date	Particulars		L.F.	Debit	Credit
	Bank A/c	Dr.		14,40,000
	To Equity share application A/c				14,40,000
	(Being share application money received on 3,60,000 shares)
	Equity share application A/c	Dr.		14,40,000
	To Equity share capital A/c				6,00,000
	To Equity share allotment A/c				4,00,000
	To Securities premium reserve A/c				2,00,000
	To Bank A/c				2,40,000
	(Being share application money adjusted & surplus refunded)
	Equity shares allotment A/c	Dr.		12,00,000
	To Equity shares capital A/c				6,00,000
	To securities premium A/c				6,00,000
	(Being allotment made due)
	Bank A/c	Dr.		7,96,800
	Call in arrears A/c	Dr.		3,200
	To Equity shares allotment A/c				8,00,000
	(Being allotment money received except on 800 shares)
	Equity shares capital A/c	Dr.		4,800
	Securities premium reserve A/c	Dr.		2,400
	To Call in arrears A/c				3,200
	To Forfeited A/c				4,000
	(Being 800 shares of Ravinder forfeited after allotment)
	Equity share first & final call A/c	Dr.		11,95,200
	To Equity shares capital A/c				7,96,800
	To Securities premium reserve A/c				3,98,400
	(Being first & final call due on 1,99,200 shares)
	Bank A/c	Dr.		11,90,400
	Call in arrears A/c	Dr.		4,800
	To Equity share first & final call A/c				11,95,200
	(Being first & final call money received except on 800 shares held by Harinder)
	Equity share capital A/c	Dr.		8,000
	Securities premium reserve A/c	Dr.		1,600
	To calls in arrears A/c				4,800
	To Forfeited share A/c				4,800
	(Being 800 shares of Harinder forfeited for non-payment of call money)
	Bank A/c	Dr.		8,000
	Forfeited shares A/c	Dr.		2,000
	To Equity share capital A/c				10,000
	(Being 1,000 shares reissued @ ₹ 8 per share fully paid up)
	Share forfeited A/c	Dr.		3,200
	To capital reserve A/c				3,200
	(Being balance of share forfeited a/c transferred to capital reserve A/c)

Working Note:

(A). Total number of shares applied by Ravinder
800 x 3,00,000/2,00,000=1,200 shares
Excess application money received
1,200 shares - 800 shares = 400 shares*4= ₹ 1,600
(B). Allotment money due from Ravinder (800*6)	4,800
Less: Excess received on application stage	1,600
Allotment money not received	3,200
(C). Total amount due on allotment (2,00,000*6)	12,00,000
Less: Excess received on application	4,00,000
	8,00,00
Less: Amount not received from Ravinder on allotment	3,200
Net Amount received on allotment in cash	7,96,800

2 Harider was allotted =1,200*2,00,00/3,00,00 = 800 shares

3 Calculation of profit on reissued to be transferred to Capital Reserve

Amount forfeited on reissued shares	4,000
Harider (200share)	1,200
Total forfeited amount on 100 shares	5,200
Less discount on reissued	2,000
Profit on reissued to be transferred to capital reserve	3,200