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

Q-46 - CH-8 - Usha +2 Book 2018 - Solution-min

Question 46 Chapter 8 of +2-Part-1

Free Accounting book Solution - Class 11 and Class 12

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      

It all about Question 46 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 46 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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