Question 45 Chapter 8 of +2-Part-1 – USHA Publication 12 Class Part – 1

Q-45 - CH-8 - Usha +2 Book 2018 - Solution-min

Question 45 Chapter 8 of +2-Part-1

Free Accounting book Solution - Class 11 and Class 12

45. (Prorata Allotment/Forfeiture/Reissue) Bharatiya Textile Co. Ltd. issued its prospectus on 1st January 2016 inviting applications for 10,000 shares of Rs. 10 each at a premium of Rs. 2 per share payable as under:
Rs. 2 on application
Rs. 6 on allotment (including premium)
Rs. 2 on first call
Rs. 2 on final call.
Applications for 15,000 shares were received. Applications for 2,500 shares were not allotted any share and their application money was refunded. The remaining applicants were allotted 10,000 shares pro-rata and money over-paid on application was used towards payment on allotment. All calls having been made, money was realised from all shareholders except one who was allotted 100 shares and who failed to pay two calls. His shares were, therefore forfeited by the directors and were later re-issued as fully paid at a price of Rs. 8 per share. Give journal entries in the books of the company

The solution of Question 45 Chapter 8 of +2 Part-1: –

  Applied Allotted
Refund 2,500  
Pro rate 12,500 10,000
  15,000 10,000

 

1. Allotment amount to be received
 
Total amount required ( 10,000X6) 60,000
Less : surplus app. Amount , adjusted towards allotment (12,500-10,000)X2) 500
  55,000
2. Allotment credited to capital reserve A/c  
Received on 100 shares (app. Money – allotment money –share premium )=(2+6-2) =6X100 600
Less : utilized on reissue (10-8)= 2X100 200
  400
Journal
Date   Particulars
L.F. Debit Credit
A) Bank A/c( 15000 X 2) Dr.   30,000  
  To Share Application A/c       30,000
  (Being application money received)        
           
B)  Share Application A/c Dr.   30,000  
  To Share capital A/c (10,000 X 2)     20,000
  To Share allotment A/c (2,500 X 2)     5,000
  To Bank A/c (2,500 X 2)     5,000
  (Being pro-rata allotment made )        
           
C) Share allotment Call A/c (10,000 X 6) Dr.   60,000  
  To Share capital A/c(10,000 X 4)     40,000
  To Securities Premium Reserve A/c (10,000 X 2)     20,000
  (Being allotment due)        
         
D) Bank A/c (60,000-5,000) Dr.   55,000  
  To Share allotment A/c     55,000
  (Being allotment received)      
         
E) Share first Call A/c (10,000 X 2) Dr.   20,000  
  To Share capital A/c     20,000
  (Being first call due)      
         
F) Bank A/c (9,000 X 2) Dr.   19,800  
  Calls in arrears A/c Dr.   200  
  To Share first call A/c     20,000
  (Being first call received)      
         
G) Share second & final Call A/c (10,000 X 2) Dr.   20,000  
  To Share capital A/c     20,000
  (Being final call due)      
         
H) Bank A/c (9,900 X 2) Dr.   19,800  
  Calls in arrears A/c (100 X 2) Dr.   200  
  To Share second & final Call A/c     20,000
  (Being final call received)      
         
I) Share capital A/c (100X10) Dr.   1,000  
  To Share Forfeited A/c (100X6)     600
  To Calls in Arrears A/c (100X4)     400
  (Being 100 shares fortified)      
         
J) Bank A/c (100X8) Dr.   800  
  Share Fortified A/c (100X2) Dr.   200  
  To Share capital A/c (100X10)     1,000
  (Being 100 shares reissued)      
         
K) Share Fortified A/c (600-200) Dr.   400  
  To Capital Reserve A/c     400
  (Being balance transferred to capital resource)      

It all about Question 45 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 45 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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