Question 52 Chapter 8 of +2-Part-1 – USHA Publication 12 Class Part – 1

Question 52 Chapter 8 of +2-Part-1

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.

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

• Chapter No. 1 – Accounting Not for Profit Organisations
• Chapter No. 2 – Partnership Accounts – I (Introduction)
• Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
• Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
• Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
• Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
• Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
• Chapter No. 8 – Company Accounts (Share Capital)
• Chapter No. 9 – Company Accounts (Issue of Debentures)
• Chapter No. 10 – Company Accounts (Redemption of Debentures)

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

• Chapter No. 1 – Financial Statements of a Company
• Chapter No. 2 – Financial Statement Analysis
• Chapter No. 3 –  Tools of Financial Statement Analysis- Comparative and Common Size
• Chapter No. 4 – Ratio Analysis
• Chapter No. 5 – Cash Flow Statement