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Question no 71 Chapter 1 – UNIMAX Class 12 Part 2 – 2021

Question no -71 Chapter no-1 Unimax Class-12 Part-II
Question no -71 Chapter no-1 Unimax Class-12 Part-II

Question No  71 Chapter 1 – UNIMAX  Class 12 Part 2 – 2021

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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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