Question 41 Chapter 8 of +2-Part-1 – USHA Publication 12 Class Part – 1

Q-41 - CH-8 - Usha +2 Book 2018 - Solution-min

Question 41 Chapter 8 of +2-Part-1

Free Accounting book Solution - Class 11 and Class 12

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 (24,000 X 2) Dr.   14,00,000  
  To Equity Share Application A/c       14,00,000
  (Being the receipt of application money)        
           
B)  Equity Share Application 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
  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.

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 41 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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