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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Konark Ltd. invited applications for issuing 3,00,000 shares of ₹10 each. The amount per share was payable as follows: ₹3 on application, ₹3 on allotment, and ₹4 on first and final call. The company received applications for 4,00,000 shares. Allotment was done as follows: (i) applicants of 2,40,000 shares were allotted 2,00,000 shares; (ii) applicants of 1,20,000 shares were allotted 80,000 shares; (iii) the remaining applicants were allotted 20,000 shares. Money overpaid on applications was adjusted towards sums due on allotment. Divij, a shareholder belonging to group (ii) who had applied for 6,000 shares, failed to pay the allotment and call money. Faisal, another shareholder belonging to group (i) who was allotted 10,000 shares, paid the call money along with the allotment money. Divij’s shares were forfeited after the first and final call. Half of the forfeited shares were reissued at ₹10 per share, fully paid-up. Pass the necessary Journal entries to record the above transactions in the books of the company. (CBSE 2020)
JOURNAL
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Bank A/c (4,00,000 × ₹3) Dr. | 12,00,000 | |||
| To Share Application A/c | 12,00,000 | |||
| (Application money received) | ||||
| Share Application A/c Dr. | 12,00,000 | |||
| To Share Capital A/c (3,00,000 × ₹3) | 9,00,000 | |||
| To Share Allotment A/c | 3,00,000 | |||
| (Application money transferred to Share Capital; ₹3,00,000 excess adjusted against Allotment) | ||||
| Share Allotment A/c (3,00,000 × ₹3) Dr. | 9,00,000 | |||
| To Share Capital A/c (3,00,000 × ₹3) | 9,00,000 | |||
| (Allotment due on 3,00,000 shares) | ||||
| Bank A/c Dr. | 6,34,000 | |||
| To Share Allotment A/c | 5,94,000 | |||
| To First and Final Call A/c (10,000 × ₹4) | 40,000 | |||
| (Allotment received, except on Divij’s shares; Faisal’s call money for 10,000 shares received in advance along with allotment) | ||||
| First and Final Call A/c (3,00,000 × ₹4) Dr. | 12,00,000 | |||
| To Share Capital A/c | 12,00,000 | |||
| (First and final call due) | ||||
| Bank A/c Dr. | 11,44,000 | |||
| To First and Final Call A/c | 11,44,000 | |||
| (Call received, except on Divij’s shares, and net of Faisal’s advance already received) | ||||
| Share Capital A/c (4,000 × ₹10) Dr. | 40,000 | |||
| To Forfeited Shares A/c | 18,000 | |||
| To Share Allotment A/c (4,000 × ₹1.50) | 6,000 | |||
| To Share First and Final Call A/c (4,000 × ₹4) | 16,000 | |||
| (Divij’s 4,000 shares forfeited for non-payment of allotment and call) | ||||
| Bank A/c (2,000 × ₹10) Dr. | 20,000 | |||
| To Share Capital A/c (2,000 × ₹10) | 20,000 | |||
| (2,000 of the forfeited shares reissued at par, fully paid-up) | ||||
| Forfeited Shares A/c Dr. | 9,000 | |||
| To Capital Reserve A/c | 9,000 | |||
| (Full forfeited amount on the 2,000 reissued shares transferred to Capital Reserve, since reissued at par) |
Working Notes: Divij applied for 6,000 shares (group ii, ratio 80,000 ÷ 1,20,000) and was allotted 4,000. Money received on application (6,000 × ₹3) = ₹18,000; retained for his 4,000 allotted shares (4,000 × ₹3) = ₹12,000; excess = ₹6,000, adjusted against allotment. Allotment due (4,000 × ₹3) = ₹12,000, less excess ₹6,000 = ₹6,000 unpaid. Forfeited Shares credit = application money retained (₹12,000) + excess applied toward allotment (₹6,000) = ₹18,000. Capital Reserve = 18,000 × 2,000 ÷ 4,000 = ₹9,000 (no discount, reissued at par).
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This guide covers "T.S. Grewal Class 12 Vol 2 Chapter 1 Q.111 - Share Capital", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 1 - Share Capital.
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