Question 86 Chapter 8 of +2-A - T.S. Grewal 12 Class

Question 86 Chapter 8 of +2-A

Table of Contents

The solution of Question 86 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)

86. Nitro Paints Ltd. invited applications for issuing 1,60,000 equity shares of ₹ 10 each at a premium of ₹ 3 per share. The amount was payable as follows:

On application	——	₹ 6 per share(including premium ₹1);
On allotment	——	₹ 3 per share(including premium ₹ 1); and
The balance	——	on First and Final call.

Applications for 1,80,000 shares were received. Applications for 10,000 shares were rejected and pro-rata allotment was made to the remaining applicants. Overpayment received on the application was adjusted towards sums due on allotment. All calls were made and were duly received except allotment and final call from Aditya who was allotted 3,200 shares. His shares were forfeited. Half of the forfeited shares were reissued for ₹ 43,000 as fully paid-up.Pass necessary journal entries for the above transactions in the books of Nitro Paints Ltd.

The solution of Question 86 Chapter 8 of +2-A: –


Date	Particulars		L.F.	Debit	Credit
	Bank A/c	Dr		10,80,000
	To share application A/c				10,80,000
	(Being the application money received )
	Share application A/c	Dr		10,80,000
	To Share capital A/c				8,00,000
	To Securities premium A/c				1,60,000
	To share allotment A/c				60,000
	To Bank A/c				60,000
	(Being application money transferred to equity share capital )
	Share allotment A/c	Dr		4,80,000
	To Share capital A/c				3,20,000
	To Securities premium A/c				1,60,000
	(Being the allotment money due )
	Bank A/c	Dr		4,11,600
	To Share allotment A/c				4,11,600
	(Being allotment money received capital )
	Share first call A/c	Dr		6,40,000
	To Share capital A/c				4,80,000
	To Securities Premium A/c				1,60,000
	(Being the first call money due )
	Bank A/c	Dr		6,27,200
	To Share first call A/c				6,27,200
	(Being first call money received )
	Share capital A/c	Dr		32,000
	Securities Premium Reserve A/c	Dr		6,400
	To share forfeiture A/c				8,400
	To share allotment A/c				12,800
	To share first call A/c				17,200
	(Being share forfeited )
	Bank A/c	Dr		43,000
	To Securities premium A/c				16,000
	To share capital A/c				27,000
	(Being forfeited share reissue )
	Share forfeiture A/c	Dr		8,600
	To capital Reserve A/c				8,600
	(Being the gain on reissue transferred to capital reserve )

Working notes –

Shares applied by Aditya	=	1,70,000	* 3,200	=	3,400 shares
		1,60,000

Amount not paid by Aditya on Allotment	Amount
Money received on the application	20,400
Less: Application money transferred to share capital	(19,200)
Excess received on the application	1,200
Amount due on allotment	9,600
Less: Excess Adjustment	(1,200)
Amount unpaid by Aditya	8,400
	700

Money received on Allotment	Amount
Share allotment due (50,000 * R 4)	2,00,000
Less: Excess money on application + calls in arrear (3600 * Rs 2 )	(50,000+ 2,100))
	1,47,900

Money received on first and final call	Amount
Share first and final call money due ( 4,000 * Rs 3)	1,50,000
Less: Calls in arrear by Ram and Shyam ( 3,600 * Rs 3 )	(2,100)
	1,47,900

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Particulars	Amount
Share Forfeiture (Cr.)	4,200
less: Share Forfeiture on Shyam shares	(1,400)
Less: Share Forfeiture Debit	(700)
Balance in Share Forfeiture A/c	2,100