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Question 52 Chapter 8 of +2-Part-1
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52. (Prorata Allotment/Forfeiture/Reissue) Delhi Software Company issued prospectus inviting applications for 4,00,000 shares of Rs. 10 each at a premium of Rs. 2 per share payable as follows :
On application Rs. 3, on allotment Rs. 4 (including premium): on first call Rs. 3 and on second call Rs. 2
Applications were received for 6,00,000 shares and allotment was made prorata basis. Money overpaid on applications was employed on allotment.
Mohit who was allotted 800 shares failed to pay allotment money on his subsequent failure. to pay first call his shares were forfeited, Pradeep, the holder of 1200 shares failed to pay two calls and his shares were forfeited after second call. Of the shares forfeited, 1600 shares were sold to Pragati at Rs. 9, fully paid up, the whole to Mohit’s share being included.
Prepare Journal and Balance Sheet
The solution of Question 52 Chapter 8 of +2 Part-1: –
Journal
| Date | Particulars | L.F. | Debit | Credit | |
| A | Bank A/c( 6,00,000 X 3) | Dr. | 18,00,000 | ||
| To Share Application A/c | 18,00,000 | ||||
| (Being the receipt of application money) | |||||
| B | Share Application A/c | Dr. | 18,00,000 | ||
| To Share capital A/c | 12,00,000 | ||||
| To Share allotment A/c | 6,00,000 | ||||
| (Being pro rata allotment made ) | |||||
| C | Share allotment A/c | Dr. | 16,00,000 | ||
| To Share capital A/c | 8,00,000 | ||||
| To Secruity Premium A/c | 8,00,000 | ||||
| (Being amount due on allotment ) | |||||
| D | Bank A/c | Dr. | 9,98,000 | ||
| Calls in arrears A/c | Dr. | 2,000 | |||
| To Share allotment A/c | 10,00,000 | ||||
| (Being amount received on allotment exception of 800 shares ) | |||||
| E | Share first Call A/c | Dr. | 12,00,000 | ||
| To Share capital A/c | 12,00,000 | ||||
| (Being amount due on first call ) | |||||
| F | Bank A/c | Dr. | 11,94,000 | ||
| Calls in arrears A/c | Dr. | 6,000 | |||
| To Share first call A/c | 12,00,000 | ||||
| (Being amount received on first call exception of 2,000 shares ) | |||||
| G | Share capital A/c | Dr. | 6,400 | ||
| Secruity Premium A/c | Dr. | 1,600 | |||
| To Share Forfeited A/c | 3,600 | ||||
| To Calls in Arrears A/c | 4,400 | ||||
| (Being 800 shares fortified) | |||||
| H) | Share Second & final Call A/c | Dr. | 7,98,400 | ||
| To Share capital A/c | 7,98,400 | ||||
| (Being amount due on final call) | |||||
| I) | Bank A/c | Dr. | 7,96,200 | ||
| Calls in arrears A/c | Dr. | 2,400 | |||
| To Share second & Final call A/c | 7,98,400 | ||||
| (Being amount received on allotment ) | |||||
| J) | Share capital A/c | Dr. | 12,000 | ||
| To Share Forfeited A/c | 6,000 | ||||
| To Calls in Arrears A/c | 6,000 | ||||
| (Being 1,200 shares fortified) | |||||
| K) | Bank A/c | Dr. | 14,400 | ||
| Share Fortified A/c | Dr. | 1,600 | |||
| To Share capital A/c | 16,000 | ||||
| (Being 1,600 shares reissued) | |||||
| L) | Share Fortified A/c | Dr. | 6,000 | ||
| To Capital Reserve A/c | 6,000 | ||||
| (Being balance in share fortified transferred to capital reserve) | |||||
Balance Sheet Schedule III (Part I)
| Particulars | Note no/. | FIG. RELATING TO CURRENT REPORTNG PERIOD | FIG. RELATING TO PREVIOUS REPORTNG PERIOD |
| i) Equity & Liability | |||
| Shareholders fund | |||
| Share Capital | 1 | 39,98,000 | |
| Reserve & Surplus | 2 | 8,04,400 | |
| Non current Liabilities | 3 | ||
| Current Liabilities | 4 | ||
| Total | 48,02,400 | ||
| ii) Assets | |||
| Non -Current Assets | |||
| Current Assets | |||
| Cash & Cash equivalent | 48,02,400 | ||
| Cash at bank | |||
| Total | 48,02,400 |
Working Notes:
Amount transferred to capital reserve
| Shares forfeited – Mohit’s shares | 3,600 |
| Add: Shares forfeited – Pradeep’s 300 shares which are reissued = 6,000/1,200 X 800 | 4,000 |
| Retained for call | 2,500 |
| 7,600 | |
| Less : loss on reissue of 1,600 shares | 1,600 |
| Capital reserve | 6,000 |
It all about Question 52 Chapter 8 of +2-Part-1, If you have any problem please comment below.
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Forfeiture of shares – Its accounting Entries
End of Solution
Check Out the Solution of all questions of this chapter:
The solution to all questions of Chapter No. 8 – Company Accounts (Share Capital) Class 12 Usha Publication – 2024 is shown as follows, click on the image of the question to get the solution.
Question 03 Chapter 8 of +2 Part-1 – USHA Publication 12 Class Part – 1
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Question 19 B Chapter 8 of +2 Part-1 – USHA Publication 12 Class Part – 1
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Question 34 Chapter 8 of +2-Part-1 – USHA Publication 12 Class Part – 1
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Question 53 Chapter 8 of +2-Part-1 – USHA Publication 12 Class Part – 1
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Chapter-Wise Solution of Usha Publication Accountancy – Part 2 Class 12 – Session 2024-25 as per the PSEB curriculum
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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
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Chapter No. 14 – Accounting Ratios
Chapter No. 15 – Cash Flow Statement
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- Chapter No. 1 – Company Accounts (Share Capital)
- Chapter No. 2 – Issue of Debentures
- Chapter No. 3 – Redemption of Debentures
- Chapter No. 4 – Financial Statements of a Company (Balance Sheet Only)
- Chapter No. 5 -Financial Statement Analysis
- Chapter No. 6 – Tools/Methods of Financial Analysis
- Chapter No. 7 – Ratio Analysis
- Chapter No. 8 – Cash Flow Statement
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