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Question 51 Chapter 8 of +2-Part-1
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51. (Prorata Allotment/Forfeiture/Reissue) Z Ltd. invited applications for issuing 2,00,000equity shares of Rs. 25 per share. The amount was payable as follows:
On Application and allotment Rs. 10 per share Balance on first and final balance amount. Applicants for 2,50,000 shares were received. Applications for 25,000 shares were rejected and shares were allotted on pro-rata basis to the remaining applicants. All calls were made and were duly received except the first and final call on 2,000 shares allotted to Vijay. His shares were forfeited. The forfeited shares were reissued @ Rs. 30 per share fully paid up.
Pass necessary journal entries in the books of the company
The solution of Question 51 Chapter 8 of +2 Part-1: –
Journal
| Date | Particulars | L.F. | Debit | Credit | |
| A) | Bank A/c( 2,50,000 X 10) | Dr. | 25,00,000 | ||
| To Share Application Allotment A/c | 25,00,000 | ||||
| (Being the receipt of application money) | |||||
| B) | Share Application A/c | Dr. | 25,00,000 | ||
| To Share capital A/c | 20,00,000 | ||||
| To Share first & Final A/c | 2,50,000 | ||||
| To Bank A/c (25,000 X 10) | 2,50,000 | ||||
| (Being 2,00,000 shares allotted on pro-rata basis & money refunded on 25,000 rejected ) | |||||
| C) | Share final Call A/c | Dr. | 30,00,000 | ||
| To Share capital A/c | 30,00,000 | ||||
| (Being final due on 2,00,000 shares @ Rs. 15 ) | |||||
| D) | Bank A/c | Dr. | 27,22,500 | ||
| Calls in arrears A/c | Dr. | 27,500 | |||
| To Share final A/c | 27,50,000 | ||||
| (Being amount received on final call ) | |||||
| E) | Share capital A/c | Dr. | 50,000 | ||
| To Share Forfeited A/c | 27,500 | ||||
| To Calls in Arrears A/c | 22,500 | ||||
| (Being 2,000 shares fortified) | |||||
| F) | Bank A/c | Dr. | 60,000 | ||
| To Share capital A/c | 50,000 | ||||
| To Securities Premium A/c | 10,000 | ||||
| (Being 2,000 shares reissued) | |||||
| G) | Share Fortified A/c | Dr. | 22,500 | ||
| To Capital Reserve A/c | 22,500 | ||||
| (Being balance in share fortified transferred to capital reserve) | |||||
Working Notes:
Shares applied by Vijay = 2,25,000/2,00,000X2,000=2,250 shares
| Application & Allotment Money received 2,250 X 10 | 22,500 |
| Less : Application money adjusted on 2,000 shares X 10 ) | 20,000 |
| Retained for call | 2,500 |
| Total final due (2,00,000 X 15 ) | 30,00,00 |
| Less : Already Retained | 2,50,000 |
| Less : not Received from Vijay on call ( 2,000 X 15) – 2,500 | 27,500 |
| Not Received on call | 27,22,500 |
It all about Question 51 Chapter 8 of +2-Part-1, If you have any problem please comment below.
Forfeiture of shares – Its accounting Entries
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Chapter No. 8 – Company Accounts (Share Capital)
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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
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Chapter No. 15 – Cash Flow Statement
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- Chapter No. 1 – Company Accounts (Share Capital)
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- Chapter No. 3 – Redemption of Debentures
- Chapter No. 4 – Financial Statements of a Company (Balance Sheet Only)
- Chapter No. 5 -Financial Statement Analysis
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