Question 77 Chapter 8 of +2-A - T.S. Grewal 12 Class

Question 77 Chapter 8 of +2-A

Table of Contents

The solution of Question 77 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)

77. Himalaya Company Limited issued for public subscription 1,20,000 equity shares of ₹ 10 each at a premium for ₹ 2 per share payable as under :

With Application	—	₹ 3 per share,
On allotment (including premium)	—	₹ 5 per share,
First call	—	₹ 2 per share
On Second and Final call	—	₹ 2 per share.

Applications were received for 1,60,000 shares. The allotment was made on a pro-rata basis. Excess money on the application was adjusted against the amount due on allotment.Rohan to whom 4,800 shares were allotted failed to pay for the two calls. These shares were subsequently forfeited after the second call was made. All the shares forfeited were reissued to Teena as fully paid at ₹ 7 per share.Record journal entries and show the transactions relating to share capital in the company’s Balance Sheet.

The solution of Question 77 Chapter 8 of +2-A: –


Date	Particulars		L.F.	Debit	Credit
	Bank A/c	Dr		4,80,000
	To share application A/c				4,80,000
	(Being the application money received )
	Share application A/c	Dr		4,80,000
	To Share capital A/c				3,60,000
	To Share allotment A/c				1,20,000
	(Being application money transferred to equity share capital )
	Share allotment A/c	Dr		6,00,000
	To Share capital A/c				3,60,000
	To Securities premium A/c				2,40,000
	(Being the allotment money due )
	Bank A/c	Dr		4,80,000
	To Share allotment A/c				4,80,000
	(Being application money transferred to equity share capital )
	Share first call A/c	Dr		2,40,000
	To Share capital A/c				2,40,000
	(Being share forfeiture)
	Bank A/c	Dr		2,30,400
	Calls in arrear A/c	Dr		9,600
	To Share capital A/c				2,30,400
	(Being first call money received )
	Share the Second call A/c	Dr		2,40,000
	To Share capital A/c				2,40,000
	(Being second and final call money received )
	Bank A/c	Dr		2,30,400
	Calls in arrear A/c	Dr		9,600
	To Share first call A/c				2,30,400
	(Being second call money received )
	Equity share capital A/c	Dr		48,000
	To Share first call A/c				9,600
	To second call A/c				9,600
	To Share forfeiture A/c				28,800
	(Being the allotment money due )
	Bank A/c	Dr		33,600
	Share forfeiture A/c	Dr		14,400
	To Share capital A/c				48,000
	(Being forfeited share reissue )
	Share forfeiture A/c			14,400
	To capital Reserve A/c				14,400
	(Being the gain on reissue transferred to capital reserve )

Particulars	Details	Amount
I. Equity and Liabilities
1. Shareholders’ Funds
(a) Share Capital		12,00,000
(b) Reserves and Surplus		2,54,400
(c) Money Received against Share Warrants
2. Share Application Money Pending Allotment
3. Non-Current Liabilities
4. Current Liabilities
II. Assets
1.Non-Current Assets
(a) Fixed Assets
Tangible Assets
2. Current Assets
(d) Cash and Cash equivalents		14,54,400
Total		14,54,400

Particulars	Details	Amount
Share capital
Authorized capital
1,20,000 Equity share of Rs 10each		12,00,000
Issued capital
1,20,000 equity shares of Rs 10 each		12,00,000
Subscribed capital
Subscribed and fully paid-up
1,20,000 Equity shares of Rs10 each)		12,00,000
Capital reserve		14,400
Building		2,40,000
Cash at bank		14,54,400