Question 74 Chapter 8 of +2-A - T.S. Grewal 12 Class

Question 74 Chapter 8 of +2-A

Table of Contents

The solution of Question 74 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)

74. VXN Ltd. invited applications for issuing 50,000 equity shares of ₹ 10 each at a premium of ₹ 8 per share. The amount was payable as follows:

On Application	₹ 4 per share (Including ₹ 2 premium);
On Allotment	₹ 6 per share (Including ₹ 3 premium);
On First Call	₹ 5 per share (Including ₹ 1 premium); and
On Second and Final Call	Balance Amount

The issue was fully subscribed. Gopal, a shareholder holding 200 shares, did not pay the allotment money and Madhav, a holder of 400 shares, paid his entire share money along with the allotment money. Gopal’s shares were immediately forfeited after allotment. Afterwards, the first call was made. Krishna, a holder of 100 shares, failed to pay the first call money and Girdhar, a holder of 300 shares, paid the second call money also along with the first call. Krishna’s shares were forfeited immediately after the first call. The second and final call was made afterwards and was duly received. All the forfeited shares were reissued at ₹ 9 per share fully paid-up.
Pass necessary journal entries for the above transactions in the books of the company.

The solution of Question 74 Chapter 8 of +2-A: –


Date	Particulars		L.F.	Debit	Credit
	Bank A/c	Dr		2,00,000
	To share application A/c				2,00,000
	(Being the application money received )
	Share application A/c	Dr		2,00,000
	To Share capital A/c				1,00,000
	To Securities premium A/c				1,00,000
	(Being application money transferred to equity share capital )
	Share allotment A/c	Dr		3,00,000
	To Share capital A/c				1,50,000
	To Securities premium A/c				1,50,000
	(Being the allotment money due )
	Bank A/c	Dr		3,02,000
	To Share allotment A/c				2,98,800
	To calls in advance for calls A/c				3,200
	(Being allotment money transferred to equity share capital )
	Equity share capital A/c	Dr		1,000
	Securities premium reserve A/c	Dr		600
	To Share forfeiture A/c				400
	To share allotment A/c				1200
	(Being share forfeiture)
	Share first and final call A/c	Dr		2,49,000
	To Share capital A/c				1,99,200
	To Securities premium A/c				49,800
	(Being the first call money due )
	Bank A/c	Dr		2,47,400
	Calls in advance A/c	Dr		2,400
	To calls in advance A/c				900
	To Share first call A/c				2,48,500
	(Being first call money received )
	Equity share capital A/c	Dr		900
	Equity share capital A/c	Dr		100
	To Share forfeiture A/c				500
	To first call A/c				500
	(Being the gain on reissue transferred to capital reserve )
	Share second and final call A/c	Dr		1,49,100
	To Share capital A/c				49,700
	To Securities premium A/c				99,400
	(Being the second and final call money due )
	Bank A/c	Dr		1,47,000
	Calls in advance A/c	Dr		2,100
	To Share second and final call A/c				1,49,100
	(Being second and final call money received )
	Bank A/c	Dr		2700
	Share forfeiture A/c	Dr		300
	To Equity share capital A/c				3,000
	(Being forfeited share reissue )
	Forfeited share A/c	Dr		600
	To capital Reserve A/c				600
	(Being the gain on reissue transferred to capital reserve )