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

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

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Question 42 Chapter 8 of +2-Part-1

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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.DebitCredit
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/cDr. 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 10Dr. 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

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