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Question 40 Chapter 8 of +2-Part-1
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40. (Prorata Allotment/Forfeiture/Reissue) A Limited Company invites 50,000 equity shares of Rs. 10 each payable as follows:
On application Rs.3
On allotment RS. 4
On first call Rs. 2
On final call the balance.
Applications were received for 55,000 shares. Allotments were made on the following basis:
(i)To applicants for 35,000 shares-in full.
(ii)To applicants for 20,000 shares-15,000 shares.
Excess money paid on application was utilized towards allotment money. A shareholder who was allotted 1,500 shares out of the group applying for 20,000 shares failed to pay allotment money and money due on calls. These shares were forfeited. 1,000,forfeited shares were re-issued as fully paid on receipt of Rs. 8 per share.
Required: Show the journal entries in the books of company.
The solution of Question 40 Chapter 8 of +2 Part-1: –
Journal | |||||
Date | Particulars | L.F. | Debit | Credit | |
A) | Bank A/c | Dr. | 1,65,000 | ||
To Share Application A/c | 1,65,000 | ||||
(Being the receipt of application money on 55,000 shares @ Rs.3 per share ) | |||||
B) | Share Application A/c | Dr. | 1,50,000 | ||
To Share capital A/c | 1,50,000 | ||||
(Being the transfer of application money of 50,000 shares ) | |||||
C) | Share Allotment A/c | Dr. | 2,00,000 | ||
To Share capital A/c | 2,00,000 | ||||
(Being allotment money due on allotment of 50,000 shares @ Rs. 4 per share ) | |||||
D) | Bank A/c | Dr. | 1,95,500 | ||
To Share allotment A/c | 1,95,500 | ||||
(Being allotment money received on 48,500 shares) | |||||
E) | Share first Call A/c | Dr. | 1,00,000 | ||
To Share capital A/c | 1,00,000 | ||||
(Being amount due on first call of 50,000 share @ Rs. 2 per share) | |||||
F) | Bank A/c | Dr. | 97,000 | ||
To Share first Call A/c | 97,000 | ||||
(Being amount received on final call of 19500 share ) | |||||
G) | Share Second & final Call A/c | Dr. | 50,000 | ||
To Share capital A/c | 50,000 | ||||
(Being amount due on final call of 48,500 share) | |||||
H) | Bank A/c (19,600 X 3) | Dr. | 48,500 | ||
To Share Second & final Call A/c | 48,500 | ||||
(Being amount received on final call of 48,500 share | |||||
I) | Share capital A/c | Dr. | 15,000 | ||
To Share Allotment A/c | 4,500 | ||||
To Share first call A/c | 3,000 | ||||
To Share Second final call A/c | 1,500 | ||||
To Share Forfeited A/c | 6,000 | ||||
(Being 1500 shares fortified as per board reso. No.) | |||||
J) | Bank A/c (500 X 8 ) | Dr. | 8,000 | ||
Share Fortified A/c (500X2) | Dr. | 2,000 | |||
To Share capital A/c | 10,000 | ||||
(Being 400 shares reissued @ 20 % discount ) | |||||
K) | Share Fortified A/c (6,000 X 1,000/15,000-2,000) | Dr. | 2,000 | ||
To Capital Reserve A/c | 2,000 | ||||
(Being balance in share fortified transferred to capital reserve) |
It all about Question 40 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
- Chapter No. 1 – Accounting Not for Profit Organisations
- Chapter No. 2 – Partnership Accounts – I (Introduction)
- Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
- Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
- Chapter No. 8 – Company Accounts (Share Capital)
- Chapter No. 9 – Company Accounts (Issue of Debentures)
- Chapter No. 10 – Company Accounts (Redemption of Debentures)
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis- Comparative and Common Size
- Chapter No. 4 – Ratio Analysis
- Chapter No. 5 – Cash Flow Statement
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