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

Q-52 - CH-8 - Usha +2 Book 2018 - Solution-min

Question 52 Chapter 8 of +2-Part-1

Free Accounting book Solution - Class 11 and Class 12

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: –


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)


Note no/.

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
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

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

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