Question 90 Chapter 8 of +2-A - T.S. Grewal 12 Class

Question 90 Chapter 8 of +2-A

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The solution of Question 90 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)

90. Super Star Ltd. issued a prospectus inviting applications for 2,000 shares of ₹ 10 each at a premium:

On application	—	₹ 3 per share (including ₹ 1 premium),
On allotment	—	₹ 4 per share (including ₹ 1 premium),
On the first call	—	₹ 3 per share
On the second and final call	—	₹ 2 per share.

Applications were received for 3,000 shares and pro-rata allotment was made on the applications for 2,400 shares. It was decided to utilise excess application money towards the amount due on allotment.Ramesh, to whom 40 shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the first call, his shares were forfeited.Rajesh, who applied for 72 shares failed to pay the two calls and on such failure, his shares were forfeited. Of the shares forfeited, 80 shares were sold to Krishan credited as fully paid-up for ₹ 9 per share, the whole of Ramesh’s shares being included.Give journal entries to record the above transactions ( including cash transactions).

The solution of Question 90 Chapter 8 of +2-A: –


Date	Particulars		L.F.	Debit	Credit
	Bank A/c	Dr		9,000
	To share application A/c				9,000
	(Being the application money received )
	Share application A/c	Dr		9,000
	To Share capital A/c				4,000
	To Securities premium A/c				2,000
	To share allotment A/c				1,200
	To Bank A/c				1,800
	(Being application money transferred to equity share capital )
	Share allotment A/c	Dr		8,000
	To Share capital A/c				6,000
	To Securities premium A/c				2,000
	(Being the allotment money due )
	Bank A/c	Dr		6,664
	To Share allotment A/c				6,664
	(Being allotment money received capital )
	Share first call A/c	Dr		6,000
	To Share capital A/c				6,000
	(Being the first call money due )
	Bank A/c	Dr		5,700
	To Share first call A/c				5,700
	(Being first call money received )
	Share capital A/c	Dr		320
	Share premium A/c	Dr		40
	To share forfeiture A/c				104
	To share Allotment A/c				136
	To share first call A/c				120
	(Being share forfeited )
	Share final call A/c	Dr		3,920
	To Share capital A/c				3,920
	(Being the final call money due )
	Bank A/c	Dr		3,800
	To Share first and final call A/c				3,800
	(Being final call money received )
	Share capital A/c	Dr		600
	To share forfeiture A/c				300
	To share first A/c				180
	To share final call A/c				120
	(Being share forfeited )
	Bank A/c	Dr		720
	Share Forfeiture A/c	Dr		80
	To share capital A/c				800
	(Being forfeited share reissue )
	Share forfeiture A/c	Dr		224
	To capital Reserve A/c				224
	(Being the gain on reissue transferred to capital reserve )

Working notes –

Shares applied by Ramesh	=	2,400	* 40	=	48 shares
		2,000

Amount not paid by Aditya on Allotment	Amount
Money received on application(48 shares * Rs 3)	4800
Less: Application money transferred to share capital	(80)
Excess received on the application	64
Amount due on allotment	160
Less: Excess Adjustment	(24)
Amount unpaid by Ramesh	136

Shares allotted to Rajesh =	=	2,000	* 72	=	60shares
		2,400

	Amount
Share Allotment due	8,000
Less: Excess money on application	(1,200)
Less: calls in arrear on the allotment	(136)

Money received on the allotment	6,664

	Amount
Money due on the first call (2,000 * Rs 3)	6,000
Less: calls in arrear for Ramesh (40 *Rs 3)	(120)
Less: calls in arrear on Rajesh (60* Rs 3)	(180)
Money received on the first call	5,700

Share final call	Amount
Money due on the first call	3,920
Less: calls in arrear on Rajesh	(120)
Money received on Final call	3,800

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Money received from Ramesh	Amount
Money received from Ramesh	144
Share forfeiture Cr.	400
Less: share forfeiture Dr.	(40)
Capital reserve of Ramesh	64

Money received from Rajesh	Amount
Share forfeiture Cr.	200
Less: share forfeiture Dr.	(40)
Capital reserve of Rajesh	160

Calculation of Total on Capital Reserve
Total Capital Reserve
= Capital Reserve of 40 shares of Ramesh + Capital Reserve of 40 shares of Rajesh
= Rs.64 + 160 = Rs.224

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