Question 59 Chapter 8 of +2-A - T.S. Grewal 12 Class

Question 59 Chapter 8 of +2-A

Table of Contents

The solution of Question 59 Chapter 8 of +2-A: –

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

59. New Company Ltd. has a nominal capital of ₹ 2,50,000 in shares of ₹ 10. Of these, 4,000 shares were issued as fully paid in payment of building purchased, 8,000 shares were subscribed by the public and during the first year ₹ 5 per share were called-up, payable ₹ 2 on the application , ₹ 1 on the allotment, ₹ 1 on the first call and ₹ 1 on the second call. The amounts received in respect of these shares were:

On 6,000 shares	The full amount called,
On 1,250 shares	₹ 4 per share,
On 500 shares	₹ 3 per share,
On 250 shares	₹ 2 per share.

The Directors forfeited the 750 shares on which less than ₹ 4 had been paid. The shares were subsequently reissued at ₹ 3 per share.
Pass journal entries recording the above transactions and prepare the company’s Balance Sheet.

The solution of Question 59 Chapter 8 of +2-A: –


Date	Particulars		L.F.	Debit	Credit
	Building A/c	Dr		40,000
	To Vendor A/c				40,000
	(Being building purchased )
	Vendor A/c	Dr		40,000
	To Share capital A/c				40,000
	(Being application money transferred to equity share capital )
	Bank A/c	Dr		16,000
	To Share application A/c				16,000
	(Being the application money received. )
	Share Application A/c	Dr		16,000
	To Share Capital A/c				16,000
	(Being application money transferred to equity share capital )
	Share allotment A/c	Dr		8,000
	To Share capital A/c				8,000
	(Being the first call money due )
	Bank A/c	Dr		7,750
	Calls in arrear A/c	Dr		250
	To Share allotment A/c				8,000
	(Being first call money received )
	Share first call A/c	Dr		8,000
	To Share capital A/c				8,000
	(Being share forfeited )
	Bank A/c	Dr		7,750
	Calls in arrear A/c	Dr		250
	To Share capital A/c				8,000
	(Being the final call money due )
	Bank A/c	Dr		37,400
	Calls in arrear A/c	Dr		600
	To Share final call A/c				38,000
	(Being first call money received)
	Share the second call A/c	Dr		8,000
	To Share capital A/c				8,000
	(Being the second call money due )
	Bank A/c	Dr		6,000
	Calls in arrear A/c	Dr		2,000
	To capital Reserve A/c				8,000
	(Being second call money received )
	Share capital A/c	Dr		3,750
	To Share forfeiture A/c				2,000
	To calls in arrear A/c				1,750
	(Being share forfeited )
	Bank A/c	Dr		2,250
	Forfeited share A/c	Dr		1,500
	To Share capital A/c				3,750
	(Being forfeited share reissue )
	Share forfeiture A/c	Dr		500
	To capital reserve A/c				500
	(Being balance in share forfeiture account transferred to capital Reserve )

Particulars	Details	Amount
I. Equity and Liabilities
1. Shareholders’ Funds
(a) Share Capital
(b) Reserves and Surplus		78,750
(c) Money Received against Share Warrants		500
2. Share Application Money Pending Allotment
3. Non-Current Liabilities
4. Current Liabilities
Total		79,250
II. Assets
1.Non-Current Assets
(a) Fixed Assets
Tangible Assets		40,000
2. Current Assets
(d) Cash and Cash equivalents		39,250
Total		79,250

Particulars	Details	Amount
Share capital
Authorized capital
25,000 Equity share of Rs 10each		2,50,000
Issued capital
12,000 equity shares of Rs 10 each		1,20,000
Subscribed capital
Subscribed and fully paid-up
4,000 Equity shares of Rs10 every 8,000 shares of 5 called up- calls in arrear (1,250)		78,750
Capital reserve		500
Building		40,000
Cash at bank		2,02,000

Calculation of capital reserve
Particulars	Details	Amount
Calls-in-Arrears on Allotment (250 shares × Rs.1)		250
Calls-in-Arrears on First Call (750 shares × Rs.1)		750
Calls-in-Arrears on Second Call (2,000 shares × Rs.1)		2,000
Total Calls-in-Arrears Debit		3,000

Less: Calls-in-Arrears Credit (at the time of forfeiture)		(1,750)
Calls-in-Arrears to be shown in the Balance Sheet		1250

Particulars	Details	Amount
Share Forfeiture of 250 shares Cr.(on which 2 per share paid)		500
Share Forfeiture of 500 shares Cr. (on which 3 per share)		1,500
Total Share Forfeiture credit Cr.(on 750 shares)		2,000