Question 69 Chapter 8 of +2-A - T.S. Grewal 12 Class

Question 69 Chapter 8 of +2-A

Table of Contents

The solution of Question 69 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)

69. Gaurav applied for 5,000 shares of ₹ 10 each at a premium of 2.50 per share. But he was allotted only 2,500 shares on a pro-rata basis. After having paid ₹ 3 per share on the application, he did not pay allotment money of ₹ 4.50 per share (including premium) and on his subsequent failure to pay the first call of ₹ 2 per share, his shares were forfeited. These shares were reissued at the rate of ₹ 8 per share credited as fully paid.
Pass journal entries to record the forfeiture and reissue of shares.

The solution of Question 69 Chapter 8 of +2-A: –


Date	Particulars		L.F.	Debit	Credit
	Share capital A/c	Dr		17,500
	Securities Premium A/c	Dr		3,750
	To share allotment A/c				3,750
	To first call A/c				5,000
	To share forfeited A/c				12,500
	(Being share forfeited )
	Bank A/c	Dr		20,000
	Share forfeiture A/c	Dr		5,000
	To Share capital A/c				25,000
	(Being forfeited share reissue )
	Forfeited share A/c	Dr		7,500
	To capital Reserve A/c				7,500
	(Being the gain on reissue transferred to capital reserve )

Calculation of amount transfer to Capital Reserves
	Details	Amount
Amount received on application(5,000 * 3)	15,000
Less: Amount adjusted in the capital (2500 * 3 )	(7,500)
Amount received on the application		7,500

Calculation of unpaid on the allotment
Particulars	Details	Amount
Amount due on the allotment (2,500 * 4.5)	11,250
Less: Amount received on application (2500 * 3 )	(7,500)
Amount unpaid on application		3,750