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Question 33 Chapter 8 of +2-Part-1
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33. (Issue for Consideration other than Cash/Issue for Cash/Forfeiture/Reissue)
Reliance industries Ltd. was registered with a nominal capital of Rs. 5,00,000 in the shares of Rs. 10 each. It purchased a property from Shah for Rs. 1,00,000 payable in fully paid shares of company. Remaining 40.000 shares were offered to the public, payable as follows –
Rs. 2 on application : Rs. 2 on allotment: Rs. 3 on first call and Rs. 3 on final call.
All the shares were subscribed and allotted.
Raman, who holds 100 shares failed to pay both the calls and his shares were forfeited.
These were re-issued to Mohit at Rs. 8.50 per share fully paid.
Record the above in the company’s journal and prepare a balance sheet.
The solution of Question 33 Chapter 8 of +2 Part-1: –
| Journal |
|||||
| Date | Particulars |
L.F. | Debit | Credit | |
| A) | Property A/c | Dr. | 1,00,000 | ||
| To Shah A/c | 1,00,000 | ||||
| (Being property purchased by shah ) | |||||
| B) | Shah A/c | Dr. | 1,00,000 | ||
| To Share capital A/c | 1,00,000 | ||||
| (Being issue of 10,000 shares @ Rs. 10 each fully paid in payment of property purchased ) | |||||
| C) | Bank A/c (40,000 X 2) | Dr. | 80,000 | ||
| To Share Application A/c | 80,000 | ||||
| (Being the receipt of application money on 40,000 shares @ Rs.2 per share ) | |||||
| D) | Share Application A/c (40,000 X 2) | Dr. | 80,000 | ||
| To Share capital A/c | 80,000 | ||||
| (Being the transfer of application money on 40,000 shares @ Rs. 2 per share ) | |||||
| E) | Share Allotment A/c (40,000 X 2) | Dr. | 80,000 | ||
| To Share capital A/c | 80,000 | ||||
| (Being allotment money due on allotment of 40,000 shares @ Rs. 2 per share ) | |||||
| F) | Bank A/c (40,000 X 2) | Dr. | 80,000 | ||
| To Share allotment A/c | 80,000 | ||||
| (Being allotment money received in full) | |||||
| G) | Share first Call A/c (40,000 X 3) | Dr. | 1,20,000 | ||
| To Share capital A/c | 1,50,000 | ||||
| (Being amount due on first call of 40,000 share @ Rs. 3 per share) | |||||
| H) | Bank A/c (39,900 X 3) | Dr. | 1,19,700 | ||
| Calls in arrear A/c | Dr. | 3,000 | |||
| To Share first Call A/c | 1,20,000 | ||||
| (Being amount received on first call of 39,900 share @ Rs. 3 per share ) | |||||
| I) | Share first Call A/c (40,000 X 3) | Dr. | 1,20,000 | ||
| To Share capital A/c | 1,50,000 | ||||
| (Being amount due on final call of 40,000 share @ Rs. 3 per share) | |||||
| J) | Bank A/c (39,900 X 3) | Dr. | 1,19,700 | ||
| To Share first Call A/c | 1,19,700 | ||||
| (Being amount received on final call of 39,900 share @ Rs. 3 per share ) | |||||
| k) | Share capital A/c ( 100 X 10) | Dr. | 1,000 | ||
| To Share Forfeited A/c ( 100 X 3) | 400 | ||||
| To calls in arrear A/c ( 100 X 6) | 600 | ||||
| (Being forfeitures of 100 shares for non payments of first & Final call money ) | |||||
| L) | Bank A/c (100 X 8.5 ) | Dr. | 850 | ||
| Share Fortified A/c (100X1.5) | Dr. | 150 | |||
| To Share capital A/c | 1,000 | ||||
| M) | Share Fortified A/c (400-150) | Dr. | 250 | ||
| To Capital Reserve A/c | 250 | ||||
| (Being balance in share fortified transferred to capital reserve) | |||||
Working notes : –
| Date | Particulars |
Note No. | FIG. RELATING TO CURRENT REPORTNG PERIOD |
| (i) | Equity & Liability | ||
| Shareholders fund | |||
| Share Capital | 1 | 5,00,000 | |
| Reserve & surplus | 2 | 250 | |
| Non current Liabilities | |||
| Current Liabilities | |||
| Total | 5,00,250 | ||
| (ii) | Assets | ||
| Non -Current Assets | |||
| Tangible Asset | 1,00,000 | ||
| Current Assets | |||
| Cash & Cash equivalent | 4,00,250 | ||
| Total | 5,00,250 |
|---|
Note: –
| Date | Particulars |
Note No. | FIG. RELATING TO CURRENT REPORTNG PERIOD | FIG. RELATING TO PREVIOUS REPORTNG PERIOD |
| 1 | Shared capital | |||
| Authorized capital | 5,00,000 | |||
| (50,000 shares of Rs. 10 each) | ||||
| 2 | Reserve & surplus | |||
| Capital Reserve | 250 | |||
| 3 | Tangible Asset | |||
| Property | 1,00,000 | |||
| 4 | Cash & Cash equivalent | |||
| Cash at bank | 4,00,250 |
It all about Question 33 Chapter 8 of +2-Part-1, If you have any problem please comment below.
Forfeiture of shares – Its accounting Entries
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Chapter No. 8 – Company Accounts (Share Capital)
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Chapter No. 9 – Company Accounts (Issue of Debentures)
Chapter No. 10 – Company Accounts (Redemption of Debentures)
Chapter No. 11 – Financial Statements of a Company
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- Chapter No. 1 – Company Accounts (Share Capital)
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