Question 91 Chapter 8 of +2-A - T.S. Grewal 12 Class

Question 91 Chapter 8 of +2-A

Table of Contents

The solution of Question 91 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)

91. Bharat Ltd. invited applications for issuing 2,00,000 Equity Shares of ₹ 10 each. The amount was payable as:On application ₹ 3 per share, on allotment ₹ 5 per share and on first and final call ₹ 2 per share. Applications for 3,00,000 shares were received and pro-rata allotment was made to all the applicants on the following basis:Applicants for 2,00,000 shares were allotted 1,50,000 shares on pro-rata basis.Applicants for 1,00,000 shares were allotted 50,000 shares on a pro-rata basis.Bajaj, who was allotted 3,000 shares out of group applying for 2,00,000 shares failed to pay the allotment money. His shares were forfeited immediately after allotment. Sharma, who had applied for 2,000 shares out of the group applying for 1,00,000 shares failed to pay the first and final call. His shares were also forfeited.Out of the forfeited shares 3,500 shares were reissued as fully paid-up @ ₹ 8 per share. The reissued shares included all the forfeited shares of Bajaj.Give necessary journal entries to record the above transactions.

The solution of Question 91 Chapter 8 of +2-A: –


Date	Particulars		L.F.	Debit	Credit
	Bank A/c	Dr		9,00,000
	To share application A/c				9,00,000
	(Being the application money received )
	Share application A/c	Dr		9,00,000
	To Share capital A/c				6,00,000
	To share allotment A/c				3,00,000
	(Being application money transferred to equity share capital )
	Share allotment A/c	Dr		10,00,000
	To Share capital A/c				10,00,000
	(Being the allotment money due )
	Bank A/c	Dr		6,88,000
	To Share allotment A/c				6,88,000
	(Being allotment money received capital )
	Share capital A/c	Dr		24,000
	To share forfeiture A/c				12,000
	To share Allotment A/c				12,000
	(Being share forfeited )
	Share first call A/c	Dr		3,94,000
	To Share capital A/c				3,94,000
	(Being the first call money due )
	Bank A/c	Dr		3,92,000
	To Share first call A/c				3,92,000
	(Being first call money received )
	Share capital A/c	Dr		10,000
	To share forfeiture A/c				8,000
	To share first and final call A/c				2,000
	(Being share forfeited )
	Bank A/c	Dr		28,000
	Share Forfeiture A/c	Dr		7,000
	To share capital A/c				35,000
	(Being forfeited share reissue )
	Share forfeiture A/c	Dr		9,000
	To capital Reserve A/c				9,000
	(Being the gain on reissue transferred to capital reserve )

Working notes –

Shares applied by Ramesh	=	2,00,000	* 3,000	=	4,000shares
		1,50,000

Amount not paid by Aditya on Allotment	Amount
Money received on application(4,000 shares * Rs 3)	12,000
Less: Application money transferred to share capital (3,000 * Rs 3)	(9,000)
Excess received on the application	3,000

	Amount
Share Allotment due	15,000
Less: Excess money on application	(3,000)

Money received on the allotment	12,000

	Amount
Money due an allotement (2,00,000 *Rs 5 )	10,00,000
Less : excess money on application	(3,00,000)
Less : calls in arrear on Bajaj share	(12,000)
Money received on Allotment	6,88,000

forfeiture held by Bajaj =	=	2,00,000	* 3,000	=	4,000shares
		1,50,000

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Capital reserve	Amount
Share forfeiture Cr. ( Rs 4* 3,000 shares )	12,000
Less: share forfeiture Dr ( Rs 2* 3,000 shares ).	(6,000)
Capital reserve of Bajaj share	6,000

Capital reserve	Amount
Share forfeiture Cr. ( Rs 8* 500shares )	4,000
Less: share forfeiture Dr ( Rs 2* 500 shares ).	(1,000)
Capital reserve of sharmas share	3,000