Question 49 Chapter 8 of +2-Part-1
49. (Prorata Allotment/Forfeiture/Reissue)XYZ Limited has been registered with unauthorized capital of Rs. 2,00,000 dividend into 2,000 shares of Rs. 100 each of which, 1,000shares were offered for public subscription at a premium of Rs. 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 1,800 shares, of which applications for 300 shares were rejected outright; the rest of the applications were allotted 1,000 shares on pro-rata basis Excess application money was transferred to allotment.
All the monies were duly received except from Sundar, holder of 100 shares, pay allotment and first call money. His shares were later forfeited, and re-issued who failed to Shyam Rs. 60 per share Rs. 70 paid up. Final Call has not been made.
Pass necessary Cash Book and Journal entries in the books of K Limited.
The solution of Question 49 Chapter 8 of +2 Part-1: –
Journal
| Date | Particulars |
L.F. | Debit | Credit | |
| A) | Share Application A/c | Dr. | 15,000 | ||
| To Share capital A/c | 10,000 | ||||
| To Share allotment A/c | 5,000 | ||||
| (Being allotment made ) | |||||
| B) | Share allotment A/c | Dr. | 25,000 | ||
| To Share capital A/c | 20,000 | ||||
| To Secruity premium A/c | 5,000 | ||||
| (Being amount due on allotment ) | |||||
| C) | Calls in arrears A/c | Dr. | 2,000 | ||
| To Share allotment A/c | 2,000 | ||||
| (Being amount not received on allotment) | |||||
| D) | Share first Call A/c | Dr. | 40,000 | ||
| To Share capital A/c | 40,000 | ||||
| (Being amount due on first call) | |||||
| E) | Call in arrears | Dr. | 4,000 | ||
| To Share First call A/c | 4,000 | ||||
| (Being first call not received ) | |||||
| F) | Share capital A/c | Dr. | 7,000 | ||
| Secruity premium A/c | Dr. | 1500 | |||
| To Share Forfeited A/c | 1,500 | ||||
| To Calls in Arrears A/c | 6,000 | ||||
| (Being first call not received ) | |||||
| G) | Share Fortified A/c | Dr. | 1,000 | ||
| To share Capital A/c | 1,000 | ||||
| (Being fortified ) | |||||
| H) | Share Fortified A/c | Dr. | 500 | ||
| To Capital Reserve A/c | 500 | ||||
| (Being share fortified transferred ) | |||||
Cash Book (Bank Column Only)
| Particulars | Rs. | Particulars | Rs. |
| To Share Application A/c | 18,000 | By Share Application A/c | 3,000 |
| To Share Allotment A/c | 18,000 | By Balance c/d | 75,000 |
| To Share First call A/c | 36,000 | ||
| To Share Capital A/c | 6,000 | ||
| 78,000 | 78,000 |
Working Notes :
Amount not received on allotment from Sunder
| Amount Due on allotment (100 X 25) | 2,500 | ||
| Less : Amount received in excess on app. | |||
| (150 X 10) – (100X10) | 500 | ||
| Not received | 2,000 | ||
| Net amount received on allotment | |||
| Total amount due | |||
| Less : Retained on application | 5,000 | ||
| Less : not received | 2,000 | 7,000 | |
| Net amount received on allotment | 18,000 |
It all about Question 49 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)
Chapter No. 9 – Company Accounts (Issue of Debentures)
Chapter No. 10 – Company Accounts (Redemption of Debentures)
Chapter No. 11 – Financial Statements of a Company
Chapter No. 12 – Financial Statement Analysis
Chapter No. 13 – Tools of Financial Statement Analysis- Comparative and Common Size
Chapter No. 14 – Accounting Ratios
Chapter No. 15 – Cash Flow Statement
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- Chapter No. 1 – Company Accounts (Share Capital)
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