Question 42 Chapter 8 of +2-Part-1 – USHA Publication 12 Class Part – 1

Q-42- CH-8 - Usha +2 Book 2018 - Solution-min

Question 42 Chapter 8 of +2-Part-1

Free Accounting book Solution - Class 11 and Class 12

42. (Pro-rata allotment/Forfeiture/Reissue) AB Ltd. invited applications for 1,00,000 Equity shares of Rs. 10 each, payable as RS. 2 application, Rs. 3 on allotment and balance on first and final call. Applications were received for 3,00,000 shares and shares were allotted on pro-rata basis. The excess of application money was to be adjusted against allotment only. M, a shareholder, who was allotted 3,000 shares, failed to pay the call money and his shares were accordingly forfeited and reissued at Rs. 8 per shares as fully paid. Pass necessary journal entries

The solution of Question 42 Chapter 8 of +2 Part-1: –

Journal
Date   Particulars
L.F. Debit Credit
A) Bank A/c (3,00,000 X 2) Dr.   6,00,000  
  To Share Application A/c       6,00,000
  (Being application money received on 3,00,000 shares @ Rs. 2 per share)        
           
B)  Share Application A/c Dr.   6,00,000  
  To Share capital A/c     2,00,000
  To Share Allotment A/c     3,00,000
  To Bank A/c     1,00,000
  (Being application money adjusted )        
           
C) Share Allotment A/c (1,00,000 X3) Dr.   3,00,000  
  To Share capital A/c     3,00,000
  (Being allotment money due on 2,00,000 shares @ Rs. 3 per share )        
         
D) Share First & final Call A/c (1,00,000 X 5) Dr.   5,00,000  
  To Share capital A/c     5,00,000
  (Being first call money due on 2,00,000 shares @ Rs. 5 per share )      
         
E) Bank A/c (97,000 X 5) Dr.   4,85,000  
  To Share First & final Call A/c     4,85,000
  (Being final call money received on 97,000 shares)      
         
F) Share capital A/c 3,000 X 10 Dr.   30,000  
  To Share Forfeited A/c     15,000
  To First & Final Call A/c(3,000 X 5 )     15,000
  (Being forfeitures of 3,000 shares )      
         
G) Bank A/c (3000 X8 ) Dr.   24,000  
  Share Fortified A/c (3000X2) Dr.   6,000  
  To Share capital A/c       30,000
  (Being 3000 shares reissued @ discount )        
           
H) Share Fortified A/c (15,000-6,000) Dr.   9,000  
  To Capital Reserve A/c       9,000
  (Being balance in share fortified transferred to capital reserve)      

It all about Question 42 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 42 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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