Question 70 Chapter 8 of +2-A - T.S. Grewal 12 Class

Question 70 Chapter 8 of +2-A

Table of Contents

The solution of Question 70 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)

70. Telecom Ltd.’ issued 20,000 Equity Shares of ₹ 10 each at a premium of ₹ 5 per share, payable as ₹ 7 (including premium) on the application, ₹ 5 on the allotment and the balance after three months of allotment. A shareholder to whom 200 shares were allotted failed to pay the allotment and call money and his shares were forfeited. 160 of the forfeited shares were reissued for ₹ 1,600.
Give necessary entries in the company’s Journal and the Balance Sheet.

The solution of Question 70 Chapter 8 of +2-A: –


Date	Particulars		L.F.	Debit	Credit
	Bank A/c	Dr		1,40,000
	To share application A/c				1,40,000
	(Being the application money received )
	Share application A/c	Dr		1,40,000
	To Share capital A/c				1,00,000
	To Securities premium A/c				40,000
	(Being application money transferred to equity share capital )
	Share allotment A/c	Dr		1,00,000
	To Share capital A/c				1,00,000
	(Being the allotment money due )
	Bank A/c	Dr		99,000
	calls in arrear A/c	Dr		1,000
	To Share allotment A/c				1,00,000
	(Being allotment money transferred to equity share capital )
	Share first and final call A/c	Dr		60,000
	To Share capital A/c				60,000
	(Being the first and final call money due )
	Bank A/c	Dr		59,400
	Calls in arrear A/c	Dr		600
	To Share first and final call A/c				60,000
	(Being first and final call money received )
	Equity share capital A/c	Dr		2,000
	To Share forfeiture A/c				400
	To calls in arrear A/c				1,600
	(Being share forfeiture)
	Bank A/c	Dr		1,600
	To Equity share capital A/c				1,600
	(Being forfeited share reissue )
	Forfeited share A/c	Dr		320
	To capital Reserve A/c				320
	(Being the gain on reissue transferred to capital reserve )

Particulars (1)	Note no. (2)	Figures as at the end of the Current Reporting Period (3)	Figures as at the end of the Previous Reporting Period (4)
I. Equity and Liabilities
1. Shareholders’ Funds
(a) Share Capital			1,99,680
(b) Reserves and Surplus			1,00,320
(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
2. Current Assets
(d) Cash and Cash equivalents			3,00,000
Total			3,00,000

Particulars	Details	Amount
Share capital
Authorized capital
20,000 Equity share of Rs 10each
Issued capital
20,000 equity shares of Rs 10 each		2,00,000
Subscribed capital
Subscribed and fully paid-up
19,960 Equity shares of Rs10 every 8,000 shares of 5 called up- calls in arrear (80)		1,99,680
Capital reserve		1,00,000
Securities premium		320
Cash at bank		3,00,000

Share forfeiture of reissued of share
	Details	Amount
Share Forfeiture (Cr.)	320
Less: Share Forfeiture Debit	(-)
Amount received on the application		320

Calculation Of Capital Reserve
Capital Reserve = Balance share forfeiture after reissue (per share) × Numbers of Share reissued
= Rs.2 ×160 = Rs.320
Balance o share forfeiture =

Calculation of balance remaining in Shares forfeiture account.
Particulars	Details	Amount
Share Forfeiture (Dr.) ( at the time of forfeiture of 200 shares )	400
Less: Share Forfeiture (Cr) ( at the time re-issue of 160 shares)	(320)
Balance in Share Forfeiture A/c		80