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Question 41 Chapter 8 of +2-Part-1
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41. (Prorata Allotment/Call in Arrears) Metallic Ltd. invited applications for 40,000 equity shares of Rs. 50 each issued at a premium of Rs. 10 per share. The amount was payable as follows :
On application and allotment Rs. 20 per share. Balance (including premium) – on first and final call:
Applications for 70,000 shares were received. Applications for 20,000 shares were rejected and pro-rata allotment was made to the remaining applicants. First and final call was made and duly received except on 400 shares allotted to Nitesh. Journalise the above transactions.
The solution of Question 41 Chapter 8 of +2 Part-1: –
| Journal | |||||
| Date | Particulars | L.F. | Debit | Credit | |
| A) | Bank A/c (70,000 X 20) | Dr. | 14,00,000 | ||
| To Equity Share Application & Allotment A/c | 14,00,000 | ||||
| (Being the receipt of application money) | |||||
| B) | Equity Share Application & Allotment A/c | Dr. | 14,00,000 | ||
| To Equity Share capital A/c | 8,00,000 | ||||
| To Equity Share final A/c | 2,00,000 | ||||
| To Bank A/c | 4,00,000 | ||||
| (Being 40,000 shares allotted on pro rata to 50,000 app. & 20,000 shares rejected ) | |||||
| C) | Equity Share final Call A/c | Dr. | 16,00,000 | ||
| To Equity Share capital A/c | 12,00,000 | ||||
| To Securities Premium Reserve A/c | 4,00,000 | ||||
| (Being amount due on final call @ Rs. 40 including premium Rs. 10 ) | |||||
| D) | Bank A/c | Dr. | 13,86,000 | ||
| Calls in arrears A/c | Dr. | 14,000 | |||
| To Equity Share final Call A/c | 14,00,000 | ||||
| (Being amount received on final call of 400 share ) | |||||
| E) | Share capital A/c | Dr. | 20,000 | ||
| Securities Premium Reserve A/c | Dr. | 4,000 | |||
| To Share Forfeited A/c | 10,000 | ||||
| To Calls in Arrears A/c | 14,000 | ||||
| (Being 400 shares fortified) | |||||
Working Notes :
1. Calculation of amount balanced for final call
| Application Received | 70,000 |
| (-)Application Rejected | 20,000 |
| Application left for pro rata allotment | 50,000 |
| 50,000 App. Were allotted 40,000 shares | |
| Application money received (70,000 X 20) | 14,00,000 |
| Less : Refund to rejected Applicants (20,000 X 20) | 4,00,000 |
| 10,00,000 | |
| Less :Transferred to Share capital on 40,000 X 20 | 8,00,000 |
| Retained for final call | 2,00,000 |
2. Calculation of amount received on final call
| Shares applied by Nitesh = (50,000/40,000)X 400 = 500 shares | |
| Application & Allotment money Received (500X20) | 10,000 |
| Less : Adjusted to Cap. Retained (400X20) | 8,000 |
| 2,000 | |
| Total amount due in final call (400X40) | 16,000 |
| Less : Already received | 2,000 |
| Calls in arrear | 14,000 |
| Total amount due in final call | 16,00,000 |
| Less : Already received | 2,00,000 |
| 14,00,000 | |
| Not received on final Call | 14,000 |
| Received on final Call | 13,86,000 |
It all about Question 41 Chapter 8 of +2-Part-1, If you have any problem please comment below.
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Forfeiture of shares – Its accounting Entries
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Chapter No. 8 – Company Accounts (Share Capital)
Chapter No. 9 – Company Accounts (Issue of Debentures)
Chapter No. 10 – Company Accounts (Redemption of Debentures)
Chapter No. 11 – Financial Statements of a Company
Chapter No. 12 – Financial Statement Analysis
Chapter No. 13 – Tools of Financial Statement Analysis- Comparative and Common Size
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Chapter No. 15 – Cash Flow Statement
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- Chapter No. 1 – Company Accounts (Share Capital)
- Chapter No. 2 – Issue of Debentures
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- Chapter No. 4 – Financial Statements of a Company (Balance Sheet Only)
- Chapter No. 5 -Financial Statement Analysis
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