Question 43 Chapter 8 of +2-Part-1 - USHA Publication 12 Class Part

Question 43 Chapter 8 of +2-Part-1

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The solution of Question 43 Chapter 8 of +2 Part-1: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

43. (Prorata Allotment/Forfeiture) A Ltd. invited applications for issuing 80,000 shares of Rs. 10 each at a premium of Rs. 4 per share. The amount was payable as follows:
On Application Rs.5 per share
On Allotment Rs. 9 per share (including premium)
Applications were received for 1,40,000 shares.
Allotment was made on the following basis:
(i)To applicants for 80,000 shares- 60,000 shares.
(ii)To applicants for 60,000 shares – 20,000 shares.
Money over paid on applications was utilized towards sum due on allotment. Rajiv, who had applied for 1,200 shares in the first category failed to pay his dues and his shares were forfeited.
Pass Journal Entries in the books of A Ltd to record the above transactions.

The solution of Question 43 Chapter 8 of +2 Part-1: –

Journal
Date	Particulars		L.F.	Debit	Credit
A)	Bank A/c (1,40,000 X 5)	Dr.		7,00,000
	To Share Application A/c				7,00,000
	(Being the receipt of application money)

B)	Share Application A/c	Dr.		7,00,000
	To Share capital A/c				4,00,000
	To Share final A/c				2,80,000
	To Bank A/c				20,000
	(Being 80,000 shares allotted excess retained for allotment & refuned

C)	Share allotment Call A/c	Dr.		7,20,000
	To Share capital A/c				4,00,000
	To Securities Premium Reserve A/c				3,20,000
	(Being amount due on allotment )

D)	Bank A/c	Dr.		4,33,400
	Calls in arrears A/c	Dr.		6,600
	To Share allotment A/c				4,40,000
	(Being amount received on allotment of 900 share )

E)	Share capital A/c	Dr.		9,000
	Securities Premium Reserve A/c	Dr.		3,600
	To Share Forfeited A/c				6,000
	To Calls in Arrears A/c				6,600
	(Being 400 shares fortified)

Working Notes :

1 . Allotment Received
Allotment money due	7,20,000
(-) Allotment money adjusted	2,80,000
	4,40,000
(-) Allotment not paid (Rajiv)	6,600 (WN2)
Allotment money received	4,33,400


2. Allotment not paid by Rajiv
Shares applied by Rajiv	1,200
Shares allotted to Rajiv (1,200 X 60,000/80,000)	900
Excess money Received by Rajiv (300X5)	1,500
Allotment money due of Rajiv (900 X 9)	8,100
Allotment money received	6,600