Question 46 Chapter 8 of +2-Part-1 - USHA Publication 12 Class Part

Question 46 Chapter 8 of +2-Part-1

Table of Contents

The solution of Question 46 Chapter 8 of +2 Part-1: –

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

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

46. (Issue at Premium/Prorata Allotment/Forfeiture) PCS Ltd. issued a prospectus inviting application for 20,000 shares of Rs. 10 each at a premium of Rs. 2 per share payable as follows:
on application Rs. 5 (including premium)
on allotment Rs.4
on call Rs. 3
Applications were received for 30,000 shares and allotment was made Prorata to applicant. for 24.000 shares. Excess money paid on application for these shares was utilised towards payment of allotment money. Vishal who applied for 600 shares failed to pay the allotment money and on his subsequent failure to pay the call, his shares were forfeited .Pass the necessary entries in the books of PCS Ltd.

The solution of Question 46 Chapter 8 of +2 Part-1: –

Journal

Date	Particulars		L.F.	Debit	Credit
A)	Bank A/c	Dr.		1,50,000
	To Share Application A/c				1,50,000
	(Being the receipt of application money)

B)	Share Application A/c	Dr.		1,50,000
	To Share capital A/c				60,000
	To Security Premium Reserve A/c				40,000
	To Share allotment A/c				30,000
	To Bank A/c				20,000
	(Being 20,000 shares allotted )

C)	Share allotment Call A/c	Dr.		80,000
	To Share capital A/c				80,000
	(Being amount due on allotment )

D)	Bank A/c	Dr.		58,200
	Calls in arrears A/c	Dr.		1,800
	To Share allotment A/c				60,000
	(Being amount received on allotment)

E)	Share Call A/c	Dr.		60,000
	To Share capital A/c				60,000
	(Being amount due on first call)

F)	Bank A/c	Dr.		58,200
	Calls in arrears A/c	Dr.		1,800
	To Share allotment A/c				60,000
	(Being amount received on call)

G)	Share capital A/c	Dr.		6,000
	To Share Forfeited A/c				2,400
	To Calls in Arrears A/c				3,600
	(Being 600 shares fortified)

Working Notes :

Shares applied =	24,000	X 600 = 720 shares
	20,000

Excess app. money retained for allotment:
(720 X 5) – (600X5) = Rs. 600

Allotment not received on 600 shares (600 X 4)		2,400
Less : Retained		600
Not received		1,800

Allotment money received:
Total amount due		80,000
Less : Already received	20,000
Less : Not received	1,800	21,800
		58,200

Amount credited to share forfeited A/c
Received on application : 720 X 5		3,600
Less : Adjustment on premium :600 X 2		1,200
		2,400

Note: Premium received Rs. 1,200 can’t be forfeited