Question 48 Chapter 8 of +2-Part-1 – USHA Publication 12 Class Part – 1

Q-48 - CH-8 - Usha +2 Book 2018 - Solution-min

Question 48 Chapter 8 of +2-Part-1

Free Accounting book Solution - Class 11 and Class 12

48 (Pro-rata Allotment/Forfeiture/Reissue) XY Limited invited applications for issuing 50,000 equity shares of Rs. 10 each. The amount wax payable as follows
On Application Rs. 3 per share
On Allotment Rs. 4 per share
On first and final call Rs. 3 per share
Applications were received for 75,000 shares and pro-rata allotment was made as follows: Applicants for 40,000 shares were allotted 30,000 shares on pro-rata basis. Applicants for
35,000 shares were allotted 20,000 shares on pro-rata basis Ramu, to whom 1,200 shares were allotted out of the group applying for 40,000 share failed to pay the allotment money His shares were forfeited immediately after allotment. Shamu who has applied for 700 shares out of the group applying for 35,000 shares failed to pay the first and final call. His shares were also forfeited. Out of the forfeited shares 1,000 shares were reissued @ rs. 8 per share fully paid up. The reissued shares included all the forfeited shares of Shamu. Pass the journal entries to record the above transactions .

The solution of Question 48 Chapter 8 of +2 Part-1: –

Journal

Date   Particulars
L.F. Debit Credit
A) Bank A/c( 75000 X 3) Dr.   2,25,000  
  To Share Application A/c       2,25,000
  (Being the receipt of application money)        
           
B)  Share Application A/c Dr.   2,25,000  
  To Share capital A/c (50,000 X 3)     1,50,000
  To Share allotment A/c     75,000
  (Being 50,000 shares allotted & excess app. Money transferred to allotment )        
           
C) Share allotment Call A/c Dr.   2,00,000  
  To Share capital A/c     2,00,000
  (Being amount due on allotment )        
         
D) Bank A/c Dr.   1,21,400  
  Calls in arrears A/c Dr.   3,600  
  To Share allotment A/c     1,25,000
  (Being amount received on allotment )      
         
E) Share capital A/c Dr.   8,400  
  To Share Forfeited A/c     4,800
  To Calls in Arrears A/c     3,600
  (Being 1,200 shares fortified)      
         
F) Share final Call A/c Dr.   1,46,400  
  To Share capital A/c     1,46,400
  (Being amount due on final call of 48,800 shares )      
         
G) Bank A/c Dr.   1,45,200  
  Calls in arrears A/c Dr.   1,200  
  To Share allotment A/c     1,46,400
  (Being amount received on allotment )      
         
H) Share capital A/c Dr.   4,000  
  To Share Forfeited A/c     2,800
  To Calls in Arrears A/c     1,200
  (Being 1,200 shares fortified)      
         
I) Bank A/c (1000X8) Dr.   8,000  
  Share Fortified A/c Dr.   2,000  
  To Share capital A/c       10,000
  (Being 1,000 shares reissued)        
         
J) Share Fortified A/c Dr.   3,200  
  To Capital Reserve A/c     3,200
  (Being balance in share fortified transferred to capital reserve)      

Working Notes :

S. No. Shares Applied Shares Allotted Application money received Application money adjusted Excess Retained
1 40,000 30,000 1,20,000 90,000 30,000
2 35,000 20,000 1,05,000 60,000 45,000
      2,25,000 1,50,000 75,000

2 Shares applied by Ramu = 40,000/30,000 X 1,200 = 1,600 shares

Application money received from Ramu 1600 X 3     4,800
Less : Amount adjusted 1200 X 3     3,600
Retained for allotment     1,200
       
Allotted due from Ramu 1200 X 4     4,800
Less : already received     1,200
Not received on allotment on 1200 shares     3,600
       
Total amount due     2,00,000
Less : Already received     75,000
      1,25,000
Less : Not received from Ramu     3,600
Allotment received     1,21,400

 

3.  Shares applied by Shamu        700
     Shares allotted to Shamu    20,000 X 700        400
35,000

4.  Transfer to Capital Reserve

All forfeited shares of Shamu were reissued & 600 share of Ramu were reissued      
Share forfeited amount on Shamu’s shares     2,800
+ Share forfeited amount on Ramu’s shares 4,800 X 600 2,400
1,200
      5,200
– Loss on Reissue     2,000
Transfer to Capital Reserve     3,200

It all about Question 48 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

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