Question no 77 Chapter 1- Class 12 Part 2 Unimax

Question no 77 Chapter 1- Class 12 Part 2 Unimax

Bharat Ltd. invited applications for issuing 2,00,000 equity shares of ₹ 10 each. The amount was payable as follows:

On application	₹ 3 per share
On allotment	₹ 5 per share
On first & final call	₹ 2 per share

Application for 3,00,000 shares were received and pro-rata allotment was made to all the application on the following basis:
Application for 2,00,000 shares were allotted 1,50,000 shares on pro-rata basis.
Application for 1,00,000 shares were allotted 50,000 shares on pro-rata basis.
Bajaj, who was allotted 3,000 shares out of the group applying for 2,00,000 shares, failed to pay the allotment money. His shares were forfeited immediately after allotment.
Sharma who had applied for 2,000 shares out of the group applying for 1,00,000 shares failed to pay the first and final call. His shares were also forfeited.
Out of the forfeited shares 3,500 shares were reissued as fully paid up @ ₹ 8 per shares. The reissued shares included all the forfeited shares of Bajaj.
Pass the necessary journal entries to record the above transactions.

The solution of Question no 77 Chapter 1- Class 12 Part 2 Unimax: -

Journal

Date	Particulars		L.F.	Debit	Credit
	Bank A/c	Dr.		9,00,000
	To Equity share application A/c				9,00,000
	(Being application money received on 3,00,000 shares @ ₹ 3 each)
	Equity shares application A/c	Dr.		9,00,000
	To Equity shares capital A/c				6,00,000
	To Equity share allotment A/c				3,00,000
	(Being application money on 2,00,000 equity share transferred to share capital a/c on 1,00,000 equity shares transferred to equity shares allotment)
	Equity share allotment A/c	Dr.		10,00,000
	To Equity shares capital A/c				10,00,000
	(Being allotment money due on 20,000 equity share @ ₹ 5 per share)
	Bank A/c	Dr.		6,88,000
	To Equity share allotment A/c				6,88,000
	(Being received on allotment money)
Bajaj	Equity share capital A/c	Dr.		24,000
	To Equity share allotment A/c				12,000
	To Share forfeited A/c				12,000
	(Being 3000 equity share forfeited due to non-payment of allotment money)
	Equity share 1st & final call A/c	Dr.		3,94,000
	To Equity shares capital A/c				3,94,000
	(Being first & final call money due on 19,700 shares @ ₹ 2 per shares)
	Bank A/c	Dr.		3,92,000
	To Equity shares 1st & final call A/c				3,92,000
	(Being first & final call money received on 19,700 equity shares @ ₹ 2 per share with an exception of 1,000 shares)
	Equity share capital A/c	Dr.		10,000
	To Equity first & final call A/c				2,000
	To Share forfeited A/c				8,000
	(Being 2,000 equity shares forfeited due to non-payment of first & final call money)
	Bank A/c	Dr.		28,000
	Share forfeited A/c	Dr.		7,000
	To Equity share capital A/c				35,000
	(Being 3500 equity shares reissued @ ₹ 8 per share as fully paid up)
	Share forfeited A/c	Dr.		9,000
	To capital reserve A/c				9,000
	(Being the profit on 3500 forfeited transferred to capital reserve A/c)

Working Note:

1 Table showing adjustment of excess amount received on application.

	Lot 1	Lot 2	total
No. of shares applied	2,00,000	1,00,000	3,00,000
Less: no. of shares allotted	1,50,000	50,000	2,00,000
Over subscription	50,000	50,000	1,00,000
	₹	₹	₹
Excess amount received on application	1,50,000	1,50,000	3,00,000
Less: amount adjusted on allotment	1,50,000	1,50,000	3,00,000
Refunded to be made	Nil	Nil	Nil

2 Calculation amount received on allotment

No. of shares allotment to Mr. Bajaj 3000
No. of shares applied by Mr. Bajaj = 3,000*2,00,000/1,50,000	4000 share
	₹
Application money received on 4000 shared from Mr. Bajaj	12,000
Less: actual application amount on 3000 shares allotted by him (3000*3)	9,000
Excess application money adjusted towards allotment	3,000
	₹
Allotment money due from Bajaj 3000 shares (3000*5	15,000
Less: Excess application money adjusted	3000
Amount not paid by Mr. Bajaj	12,000
	₹
Total amount due on allotment = 2,00,000*5	10,00,000
Less: application money adjusted	3,00,000
	7,00,000
Less: amount not paid by Mr. Bajaj	12,000
Net amount received on allotment	6,88,000

3 Net Amount received on first & final call

	₹
Total amount due on first & final (197000* 2)	3,94,000
Less: amount not paid Mr. Sharma on 2000 shares (2000*2)	4000
Net amount received on first & final call	3,90,000

4 Calculation of amount to be transferred to Capital Reserve

	₹
Amount forfeited on 3000 shares Mr. Bajaj	12,000
Amount forfeited on 2000 shares of Mr. Sharma	16,000
Amount forfeited on 500 shares of Mr. Sharma = 500*16000/2000	4000
Total amount forfeited on 3500 shares = ₹ 12000+4000	16,000
Less discount allowed on reissued of shares	7000
Balance credited to capital reserve a/c	Dr. 9000