Question 44 Chapter 8 of +2-Part-1
44. (Prorata Allotment/Forfeiture/Reissue) K Ltd. has been registered with an authorised capital of Rs. 3,00,000 divided into 3,000 shares of Rs. 100 each of which 1,500 shares were offered for public subscription at a premium of 5 per share payable as under:
On application Rs. 10
On allotment Rs.25 (including premium)
On first call Rs. 40
On final call Rs.30
Applications were received for 2,000 shares of which applications for 200 shares were rejected the rest of the applications were allotted 1,500 shares on pro-rata basis, Excess application money was transferred to allotment.
all moneys were duly received except from Sunder holder of 300 shares who failed to pay allotment money and first call money.
His shares were later forfeited and reissued to Shyam at Rs. 60 per share Rs. 70 paid up. Final call has not been made.
The solution of Question 44 Chapter 8 of +2 Part-1: –
| Applied | Allotted | |
| Refund | 200 | |
| Pro rate | 1,800 | 1,500 |
| 2,000 | 1,500 |
Cash Book (Bank Column Only)
| Particulars | Rs. | Particulars | Rs. |
| To Share Application A/c | 20,000 | By Share Application A/c | 2,000 |
| To Share Allotment A/c | 27,600 | By Balance c/d | 1,11,600 |
| To Share First call A/c | 48,000 | ||
| To Share Capital A/c | 18,000 | ||
| 1,13,600 | 1,13,600 |
| Journal |
|||||
| Date | Particulars |
L.F. | Debit | Credit | |
| A) | Bank A/c(2,000 X 10) | Dr. | 20,000 | ||
| To Share Application A/c | 20,000 | ||||
| (Being the receipt of application money) | |||||
| B) | Share Application A/c | Dr. | 20,000 | ||
| To Share capital A/c | 15,000 | ||||
| To Share allotment A/c | 3,000 | ||||
| To Bank A/c | 2,000 | ||||
| (Being 1,800 shares allotted excess retained for allotment & refunded) | |||||
| C) | Share allotment A/c | Dr. | 37,500 | ||
| To Share capital A/c | 30,000 | ||||
| To Securities Premium Reserve A/c | 7,500 | ||||
| (Being amount due on allotment ) | |||||
| D) | Bank A/c | Dr. | 27,600 | ||
| Calls in arrears A/c | Dr. | 6,900 | |||
| To Share allotment A/c | 34,500 | ||||
| (Being amount received on allotment) | |||||
| E) | Share first Call A/c | Dr. | 60,000 | ||
| To Share capital A/c | 60,000 | ||||
| (Being amount due on first call) | |||||
| F) | Bank A/c | Dr. | 48,000 | ||
| Calls in arrears A/c | Dr. | 12,000 | |||
| To Share allotment A/c | 60,000 | ||||
| (Being amount received on first call) | |||||
| G) | Share capital A/c | Dr. | 21,000 | ||
| Securities Premium Reserve A/c | Dr. | 1,500 | |||
| To Share Forfeited A/c | 3,600 | ||||
| To Calls in Arrears A/c | 18,900 | ||||
| (Being 300 shares fortified) | |||||
| H) | Bank A/c | Dr. | 18,000 | ||
| Share Fortified A/c | Dr. | 3,000 | |||
| To Share capital A/c | 21,000 | ||||
| (Being 300 shares reissued) | |||||
| I) | Share Fortified A/c | Dr. | 600 | ||
| To Capital Reserve A/c | 600 | ||||
| (Being balance in share fortified transferred to capital reserve) | |||||
Working Notes :
| Calculation of amount received on allotment | |
| Excess money Received 360 X 10 | 3,600 |
| Less : 300 X 10 | 3,000 |
| Excess Money Retained for allotment | 600 |
| Allotment money due 300X 25 | 7,500 |
| Less : Already received | 600 |
| Not received | 6,900 |
| Total Allotment money due | |||
| Less : Not received | 6,900 | ||
| Less : Received on application | 3,000 | 9,900 | |
| Received on allotment | 27,600 |
It all about Question 44 Chapter 8 of +2-Part-1, If you have any problem please comment below.
Forfeiture of shares – Its accounting Entries
End of Solution
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Chapter No. 8 – Company Accounts (Share Capital)
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Chapter No. 9 – Company Accounts (Issue of Debentures)
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