Question 49 Chapter 8 of Class 12 Part – 2 – 2024

Question 49 Chapter 8 of Class 12 Part – 2 – 2024

49. (Forfeiture/Reissue) Prince Industries Ltd. has an authorised capital of Rs. 50,00,000 divided into 5,00,000 equity shares of Rs. 10 each. It invited applications for 1,00,000 shares of Rs. 10 each at a premium of Rs. 3 per share, payable as under:
Rs. 2 On application
Rs. 5 On allotment (including premium)
Rs. 4On first call and
Rs. 2On final call.
Applications were received for 1,50,000 shares. The application money on 30,000 shares was refunded. Whole of the shares were allotted to the applicants for 1.20,000 shares excess application money being adjusted towards allotment. X the holder of 200 shares failed to pay the first call money and his shares were forfeited. Y the holder of 300 shares, failed to pay both the calls and his shares were also forfeited after the final call was made. All the forfeited shares were reissued to Z credited as fully paid for RS. 9 per share. Show the necessary journal entries and cash book entries to record the above transactions and draw up the balance sheet of the company.

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Journal
Date	Particulars		L.F.	Debit	Credit
A)	Equity Share Application A/c (1,20,000 X 2)	Dr.		2,40,000
	To Equity Share capital A/c				2,00,000
	To Equity Share Allotment A/c				40,000
	(Being the transfer of application money on 1,00,000 shares @ Rs. 2 per share )
C)	Equity Share Allotment A/c (40,000 X 2)	Dr.		5,00,000
	To Equity Share capital A/c				2,00,000
	To Security Premium A/c				3,00,000
	(Being allotment money due on allotment of 1,00,000 shares @ Rs. 5 each including premium @ Rs. 3 per share )
D)	Equity Share first Call A/c (1,00,000 X 4)	Dr.		4,00,000
	To Equity Share capital A/c				4,00,000
	(Being amount due on first call of 1,00,000 share @ Rs.4 per share )
E)	Equity Share capital A/c ( 200 X 8)	Dr.		1,600
	To Equity Share Forfeited A/c ( 200 X 4)				800
	To Equity Share first call A/c ( 200 X 4)				800
	(Being forfeitures of 200 shares of Rs. 10 Rs. 8 called up on A/c for non payment of the first call of Rs. 4 each )
F)	Equity Share final Call A/c (99,800 X 2)	Dr.		1,99,600
	To Equity Share capital A/c				1,99,600
	(Being amount due on final call of 99,800 share @ Rs.2 per share)
G)	Equity Share final Call A/c (99,800 X 2) Dr.	Dr.		3,000
	To Equity Share Forfeited A/c ( 300 X 4)				1,200
	To Equity Share first call A/c ( 300 X 4)				1,200
	To Equity Share final call A/c ( 300 X 2)				600
	(Being forfeitures of 300 shares of Rs. 10 each fully called up on A/c for non payment of the first call of Rs. 4 each & Second Call Rs. 2 each)
H)	Share Fortified A/c	Dr.		500
	To Equity Share capital A/c				500
	(Being loss of the 500 shares reissued)
I)	Share Fortified A/c	Dr.		1,500
	To Capital Reserve A/c				1,500
	(Being balance in share fortified transferred to capital reserve)

Cash Book (Bank Column Only): –

Particulars	Rs.	Particulars	Rs.
To Equity Share Application A/c	3,00,000	By Equity Share Application A/c	60,000
(On 1,50,000 shares @ Rs. 2 each)		(On 30,000 shares @ Rs. 2 each)
To Equity Share Allotment A/c	4,60,000	By Balance c/d	13,01,500
(On 1,00,000 shares @ Rs. 5 each less Rs. 40,000 received in advance of app.)
To Equity Share First call A/c	3,98,000
(On 99,500 shares @ Rs. 4 each)
To Equity Share Final call A/c	1,99,000
(On 99,500 shares @ Rs. 2 each)
To Equity Share Capital A/c	4,500
(On 500 shares @ Rs. 3 each)
	13,61,500		13,61,500

Prince Industries Ltd. Balance Sheet: –

Date	Particulars	Note no/.	FIG. RELATING TO CURRENT REPORTNG PERIOD	FIG. RELATING TO PREVIOUS REPORTNG PERIOD
i)	Equity & Liability
	Shareholders fund
	Share Capital	1	10,00,000
	Reserve & Surplus	2	3,01,500
	Total		13,01,500
ii)	Assets
	Non -Current Assets
	Cash & Cash equivalent	3	13,01,500
	Total		13,01,500

Note 1: Shared capital

Particulars	Current year	Previous year
Authorized capital
(5,00,000 shares of Rs. 10 each)	50,00,000
Issued , subscribed , called & paid up Capital
(1,00,000 shares of Rs. 10 each fully paid & called up)	10,00,000
Total	10,00,000

Note 2: Reserve & surplus

Particulars	Current year	Previous year
Secruity premium	3,00,000
Capital Reserve	1,500
Total	3,01,000

Note 3: Cash & Cash Equivalent

Particulars	Current year	Previous year
Cash At Bank	13,01,500
Total	3,01,500

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