Question 59 Chapter 8 of Class 12 Part – 2 – 2024

Question 59 Chapter 8 of Class 12 Part – 2 – 2024

59. (Pro-rata Allotment/Forfeiture/Reissue) XY Limited invited applications for issuing 50,000 equity shares of Rs. 10 each. The amount wax payable as follows
On Application Rs. 3 per share
On Allotment Rs. 4 per share
On first and final call Rs. 3 per share
Applications were received for 75,000 shares and pro-rata allotment was made as follows: Applicants for 40,000 shares were allotted 30,000 shares on pro-rata basis. Applicants 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 share failed to pay the allotment money His shares were forfeited immediately after allotment. Shamu who has applied for 700 shares out of the group applying for 35,000 shares failed to pay the first and final call. His shares were also forfeited. Out of the forfeited shares 1,000 shares were reissued @ rs. 8 per share fully paid up. The reissued shares included all the forfeited shares of Shamu. Pass the journal entries to record the above transactions .

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Journal

Date	Particulars		L.F.	Debit	Credit
A)	Bank A/c( 75000 X 3)	Dr.		2,25,000
	To Share Application A/c				2,25,000
	(Being the receipt of application money)
B)	Share Application A/c	Dr.		2,25,000
	To Share capital A/c (50,000 X 3)				1,50,000
	To Share allotment A/c				75,000
	(Being 50,000 shares allotted & excess app. Money transferred to allotment )
C)	Share allotment Call A/c	Dr.		2,00,000
	To Share capital A/c				2,00,000
	(Being amount due on allotment )
D)	Bank A/c	Dr.		1,21,400
	Calls in arrears A/c	Dr.		3,600
	To Share allotment A/c				1,25,000
	(Being amount received on allotment )
E)	Share capital A/c	Dr.		8,400
	To Share Forfeited A/c				4,800
	To Calls in Arrears A/c				3,600
	(Being 1,200 shares fortified)
F)	Share final Call A/c	Dr.		1,46,400
	To Share capital A/c				1,46,400
	(Being amount due on final call of 48,800 shares )
G)	Bank A/c	Dr.		1,45,200
	Calls in arrears A/c	Dr.		1,200
	To Share allotment A/c				1,46,400
	(Being amount received on allotment )
H)	Share capital A/c	Dr.		4,000
	To Share Forfeited A/c				2,800
	To Calls in Arrears A/c				1,200
	(Being 1,200 shares fortified)
I)	Bank A/c (1000X8)	Dr.		8,000
	Share Fortified A/c	Dr.		2,000
	To Share capital A/c				10,000
	(Being 1,000 shares reissued)
J)	Share Fortified A/c	Dr.		3,200
	To Capital Reserve A/c				3,200
	(Being balance in share fortified transferred to capital reserve)

Working Notes :

S. No.	Shares Applied	Shares Allotted	Application money received	Application money adjusted	Excess Retained
1	40,000	30,000	1,20,000	90,000	30,000
2	35,000	20,000	1,05,000	60,000	45,000
			2,25,000	1,50,000	75,000

2 Shares applied by Ramu = 40,000/30,000 X 1,200 = 1,600 shares

Application money received from Ramu 1600 X 3			4,800
Less : Amount adjusted 1200 X 3			3,600
Retained for allotment			1,200
Allotted due from Ramu 1200 X 4			4,800
Less : already received			1,200
Not received on allotment on 1200 shares			3,600
Total amount due			2,00,000
Less : Already received			75,000
			1,25,000
Less : Not received from Ramu			3,600
Allotment received			1,21,400

3.  Shares applied by Shamu			700
Shares allotted to Shamu		20,000	X 700        400
		35,000

4.  Transfer to Capital Reserve

All forfeited shares of Shamu were reissued & 600 share of Ramu were reissued
Share forfeited amount on Shamu’s shares			2,800
+ Share forfeited amount on Ramu’s shares	4,800	X 600	2,400
	1,200
			5,200
– Loss on Reissue			2,000
Transfer to Capital Reserve			3,200

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