Question 40 Chapter 8 of +2-Part-1 – USHA Publication 12 Class Part – 1

Q-40- CH-8 - Usha +2 Book 2018 - Solution-min

Question 40 Chapter 8 of +2-Part-1

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

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 40 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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