Question 39 Chapter 8 of +2-Part-1 – USHA Publication 12 Class Part – 1

Q-39- CH-8 - Usha +2 Book 2018 - Solution-min

Question 39 Chapter 8 of +2-Part-1

39. (Prorata Allotment/Forfeiture/Reissue) Indian Oil Company issued 20,000 shares of RS. 10 each payable Rs. 2 on application; Rs. 4 on allotment and balance in two equal calls. It received applications for 24,000 shares. The pro-rata allotment was made on applied shares. Excess application money was retained.
Kuljeet who was allotted 500 shares did not pay allotment money and two subsequent calls. His shares were forfeited and reissued at Rs. 8 per share fully paid up.
Pass necessary entries.

The solution of Question 39 Chapter 8 of +2 Part-1: –

Journal
Date   Particulars
L.F. Debit Credit
A) Bank A/c (24,000 X 2) Dr.   48,000  
  To Share Application A/c       48,000
  (Being the receipt of application money on 24,000 shares @ Rs.2 per share )        
           
B)  Share Application A/c Dr.   48,000  
  To Share capital A/c     40,000
  To Share allotment l A/c     8,000
  (Being the application money Adjusted )        
           
C) Share Allotment A/c Dr.   80,000  
  To Share capital A/c     80,000
  (Being allotment money due on allotment of 20,000 shares @ Rs. 4 per share )        
         
D) Bank A/c Dr.   70,200  
  To Share allotment A/c     70,200 
  (Being allotment money received on 19,500 shares)      
         
E) Share first Call A/c Dr.   40,000  
  To Share capital A/c     40,000
  (Being amount due on first call)      
         
F) Bank A/c Dr.   39,000  
  To Share final Call A/c     39,000
  (Being amount received on final call of 19500 share )      
         
G) Share final Call A/c Dr.   40,000  
  To Share capital A/c     40,000
  (Being amount due on final call )      
         
H) Bank A/c Dr.   39,000  
  To Share final Call A/c     39,000
  (Being amount received on final call of 19500 share )      
         
I) Share capital A/c Dr.   5,000  
  To Share Allotment A/c     1,800
  To Share first call A/c     1,000
  To Share Second final call A/c     1,000
  To Share Forfeited A/c     1,200
  (Being 500 shares fortified)      
         
J) Bank A/c (500 X 8 ) Dr.   4,000  
  Share Fortified A/c (500X2) Dr.   1,000  
  To Share capital A/c     5,000
  (Being 500 shares reissued)      
         
K) Share Fortified A/c Dr.   200  
  To Capital Reserve A/c     200
  (Being balance in share fortified transferred to capital reserve)      

Working Notes :

Shares applied by Kuljeet= (24,000/20,000 )X 500 = 600 share

Excess app. Money paid by Kuljeet = 100 X 2 = Rs. 200

Amount due from Kuljeet on allotment = 500 X 4 = Rs. 4,000

Less Advance App. Money received = Rs. 200

Amount not paid by Kuljeet on allotment = Rs 1,800

It all about Question 38 Chapter 8 of +2-Part-1, If you have any problem please comment below.

Forfeiture of shares – Its accounting Entries

You can also Check out the solved question of other Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 1 min - Question 39 Chapter 8 of +2-Part-1 - USHA Publication 12 Class Part - 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firm

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