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

Q-43 - CH-8 - Usha +2 Book 2018 - Solution-min

Question 43 Chapter 8 of +2-Part-1

Free Accounting book Solution - Class 11 and Class 12

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

It all about Question 43 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 43 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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