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Question no 72 Chapter 1 – UNIMAX Class 12 Part 2 – 2021

Question no -72 Chapter no-1 Unimax Class-12 Part-II
Question no -72 Chapter no-1 Unimax Class-12 Part-II

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Question No  72 Chapter 1 – UNIMAX  Class 12 Part 2 – 2021

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Z Ltd. invited applications for issuing 50,000 equity shares of ₹ 10 each. The amount was payable as follows:

On application₹ 3 per share
On allotment₹ 4 per share
On first & final call₹  3 per share

Applications for 75,000 shares were received and pro-rata allotment was mode as follows:
Application for 40,000 shares were allotted 30,000 shares on pro-rata basis.
Application for 35,000 shares were allotted 20,000 shares on pro-rata basis.
Ramu to whom 1,200 shares were allotted out of the group applying for 40,000 shares failed to pay the allotment money. His shares were forfeited immediately after allotment.
Shamu who had applied for 700 shares out of the group applying for 35,000 shares failed to pay the allotment money. His shares were forfeited immediately after allotment.
Out of the forfeited shares 1,000 shares were reissued @ 3 per share fully paid up. The reissued shares included all the forfeited shares of Shamu.
Pass necessary journal entries to record the above transactions.

The solution of Question 72 Chapter 1 of +2 Part-2: –

Journal

Date  Particulars
L.F.DebitCredit
 Bank A/cDr. 2,25,000 
 To Equity share application A/c   2,25,000
 (Being application money received on 75,000 shares @ ₹ 3 each)    
 Equity share application A/cDr. 2,25,000 
 To Equity share capital A/c  1,50,000
 To Equity share allotment A/c  75,000
 (Being application money transferred to share capital A/c & share allotment)    
 Equity shares allotment A/cDr. 2,00,000 
 To Equity shares capital A/c  2,00,000
 (Being allotment money due on 50,000 shares @ 4 per share)    
 Bank A/cDr. 1,20,700 
 To Equity shares allotment A/c  1,20,700
 (Being allotment money received except on 1600 shares)    
RamuEquity share capital A/cDr. 8400 
 To Equity share allotment A/c  3600
 To Share forfeited A/c  4800
 (Being 1200 shares forfeited due to non-payment of allotment)   
ShamuEquity share capital A/cDr. 2800 
 To Equity shares allotment A/c  700
 To Share forfeited A/c  2100
 (Being 400 shares forfeited due to non-payment of allotment money)   
 Bank A/cDr. 9,000 
 Share forfeited A/cDr.  1,000 
 To Equity share capital A/c  10,000
 (Being 1000 share forfeited reissued @ ₹ 9 per share fully paid up)   
 Share forfeited A/cDr. 3500 
 To capital reserve A/c   3500
 (Being the profit on 1000 forfeited shares transferred to capital reserve A/c)    

Working Note:

 Shares appliedShares allotted
Lot 140,00030,000
 35,00020,000
 75,00050,000

1 Table showing adjustment of excess amount received on application.

 Lot 1Lot 2total
No. of shares applied40,00035,00075,000
Less: no. of shares allotted30,00020,00050,000
Over subscription10,00015,00025,000
    
 
Excess amount received on application @ ₹ 330,00045,00075,000
Less: amount adjusted on allotment @ ₹ 430,00045,00075,000
Refunded to be madeNilNilNil

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2 Net Amount received on allotment

No. of share allotted to Ramu = 1200 share 
No. of shares applied by Ramu = 1200 x 40,000/30,0001600 share
 
Application money received on (1600 shares of Mr. Ramu 1600*3)4800
Less: actual application amount on 1200 shares (1200*3)3600
Excess application money adjusted towards allotment1200
 
Allotment amount due Mr. Ramu on 1200 shares = 1200 x 44800
Less: Excess application money adjusted1200
 3600
  
No. of shares applied by Mr. Shamu700share
No of shares allotted to Mr. Shamu = 700 x 20,000/35,000400share
 
Application money received on 700 shares of Mr. Shamu (700 x 3)2100
Less: actual application amount on 400 shares (400 x 3)1200
Amount not paid by Mr. Ramu3600
No. of shares applied by Mr. Shamu700share
No. of shares allotted to Mr. Shamu = 700 x 20,000/35,000400share
 
Application money received on700 shares of Mr. Shamu (700 x 3)2100
Less: Actual application amount on 400 shares (400 x 3)1200
Excess application money adjusted towards allotment900
 
Allotment amount due from Mr. Shamu on 400 shares = (44 x 4)1600
Less: Excess application money adjusted900
Amount not paid by Mr. Shamu700
 
Total amount due on allotment = (50000 x 4)2,00,000
Less: application money already adjusted75000
 1,25,000
Less: amount not paid by Mr. Shamu3600
 1,21,400
Less: amount not paid by Mr. Shamu700
Net amount received on allotment1,20,700

4 Calculation of amount to be transferred to Capital Reserve

  
Amount forfeited on 1200 shares of Mr. Ramu = ₹ 4800 
Amount forfeited on 600 shares of Mr. Ramu =4800 x 600/1200 = 2400 
Amount forfeited on 400 shares of Mr. Shamu = ₹ 2100 
Amount forfeited on 600 shares of Mr. Shamu = ₹ 2400 
Total amount of forfeited on 1000 shares = 4500 
Less discount allowed on reissued shares = 4500 
Balance credited to capital reserve a/c = 3500 

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