Question No 71 Chapter 1 – UNIMAX Class 12 Part 2 – 2021
A company issued for public subscription 50,000 equity shares of ₹ 20 each at a premium of ₹ 4 per share, payable as under:
On application | ₹ 4 per share |
On allotment | ₹ 10 per share (including premium) |
On first & final call | ₹ 10 per share |
Application were received for 75,000 equity shares. The shares were allotted pro-rata to application of 60,000 shares, the remaining applications being rejected. Money overpaid on allotment was utilized towards the sum due on allotment.
‘A’ to whom 2,000 shares were allotted failed to pay the allotment money and the call money ‘B’ who was allotted 2,500 shares failed to pay the call money. These shares were subsequently forfeited after the first and final call was mode. The shares forfeited from ‘B’ were allotted to ‘X’ at ₹ 10 per shares fully paid up. Of the shares forfeited from ‘A’ 1,500 shares were reissued to ‘Y’ at ₹ 22 per share.
Pass necessary journal entries to record the above transactions in the books of the company and show the working notes clearly.
The solution of Question 71 Chapter 1 of +2 Part-2: –
Journal
Date | Particulars |
L.F. | Debit | Credit | |
Bank A/c | Dr. | 3,00,000 | |||
To share application A/c | 3,00,000 | ||||
(Being share application money received on 75,000 shares @ ₹ 4 each) | |||||
Share application A/c | Dr. | 3,00,000 | |||
To share capital A/c | 2,00,000 | ||||
To share allotment A/c | 40,000 | ||||
To bank A/c | 60,000 | ||||
(Being share application A/c transferred to share capital A/c & balance refunded) | |||||
Shares allotment A/c | Dr. | 5,00,000 | |||
To shares capital A/c | 3,00,000 | ||||
To securities premium A/c | 2,00,000 | ||||
(Being share allotment money due on 50,000 shares @ 10 each including premium ₹ 4 each) | |||||
Bank A/c | Dr. | 4,41,600 | |||
To shares allotment A/c | 4,41,600 | ||||
(Being allotment money received except on 2000 shares) | |||||
Share first call A/c | Dr. | 5,00,000 | |||
To shares capital A/c | 5,00,000 | ||||
(Being first & final call due on 50,000 shares @ ₹ 10 each including premium ₹ 4 each) | |||||
Bank A/c | Dr. | 4,55,000 | |||
To Share first & final call A/c | 4,55,000 | ||||
(Being first & final call money received exception of 4500 share @ ₹ 10 each) | |||||
Share capital A/c | Dr. | 40,000 | |||
Securities premium reserve A/c | Dr. | 8,000 | |||
To Share allotment A/c | 18,400 | ||||
To Share first & final call A/c | 20,000 | ||||
To Share forfeited A/c | 9,600 | ||||
(Being 2000 shares forfeited due to non-payment of allotment and calls money) | |||||
A. | Share capital A/c | Dr. | 50,000 | ||
To Share first & final call A/c | 25,000 | ||||
To Share forfeited A/c | 25,000 | ||||
(Being 2500 shares forfeited for non-payment of final call) | |||||
Bank A/c | Dr. | 45,000 | |||
Share forfeited A/c | Dr. | 5,000 | |||
To Share capital A/c | 50,000 | ||||
(Being 2500 share forfeited were reissued at ₹ 18 each fully paid up) | |||||
Bank A/c | Dr. | 33,000 | |||
To Share capital A/c | 30,000 | ||||
To Securities premium A/c | 3,000 | ||||
(Being 1500 shares reissued to Y @ ₹ 22 per share) | |||||
Share forfeited A/c | Dr. | 27,200 | |||
To capital reserve A/c | 27,200 | ||||
(Being balance of share forfeited a/c transferred to capital reserve A/c) |
Working Note:
Shares applied | Shares allotted | |
Lot 1 | 27,200 | Nil |
Lot 2 | 60,000 | 50,000 |
75,000 | 50,000 |
1 Table showing adjustment of excess amount received on application.
Lot 1 | Lot 2 | total | |
No. of shares applied | 15,000 | 60,000 | 75,000 |
Less: no. of shares allotted | Nil | 50,000 | 50,000 |
Over subscription | 15,000 | 10,000 | 25,000 |
₹ | ₹ | ₹ | |
Excess amount received on application @ ₹ 4 | 60,000 | 40,000 | 300000 |
Less: amount adjusted on allotment | Nil | 40,000 | 40,000 |
Refunded to be made | 60,000 | Nil | 60000 |
2 Calculation of unpaid amount on allotment on 2000 shares held by A.
No. of shares applied by A 2400 shares (2000*6/5) | |
₹ | |
Amount received on application @ ₹ 4 (2400*4) | 9600 |
Less: actual application amount on 2000 shares allotted to A (2000*4) | 8000 |
Amount to be adjusted on allotment | 1600 |
₹ | |
Amount due on allotment from A (2000*10) | 20,000 |
Less: amount already received now to be adjusted | 1600 |
Unpaid amount on 100 shares of Sunder on allotment | 18,400 |
3 Net Amount received on allotment
₹ | |
Total amount due on allotment (50,000 share* ₹10) | 5,00,000 |
Less: amount already adjusted an allotment | 40,000 |
4,60,000 | |
Less: unpaid amount on Sunder’s shares | 18,400 |
Net amount received on allotment | 4,41,600 |
4 Calculation of amount to be transferred to Capital Reserve
₹ | |
Amount forfeited on 2500 shares of B | 25,000 |
Less: Discount on reissue (2500*2) | 5,000 |
20,000 | |
₹ | |
9600 | |
Amount forfeited on 2000 shares of A on 1500 shares amount forfeited | 7200 |
Less discount on reissued of shares | Nil |
7200 | |
Net amount to be transferred to capital reserve (20,000+7,200) | 27,200 |
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Share Capital: Meaning, Types, and Classes
Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution
- Chapter No. 1 – Accounting Not for Profit Organisations
- Chapter No. 2 – Partnership Accounts – I (Introduction)
- Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
- Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
- Chapter No. 8 – Company Accounts (Share Capital)
- Chapter No. 9 – Company Accounts (Issue of Debentures)
- Chapter No. 10 – Company Accounts (Redemption of Debentures)
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis- Comparative and Common Size
- Chapter No. 4 – Ratio Analysis
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
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