1. You are working as an accountant in Primrose Ltd. The company issued a prospectus
inviting applications for 60,000 equity shares of Rs. 10 each at a premium of Rs. 2 per share
payable as Rs. 2 per share on application, Rs. 5 per share on allotment (including premium), Rs.
3 per share on first call and Rs. 2 per share on second and final call.
Applications were received for 90,000 shares and pro rata allotment was made on the
applications for 72,000 shares, rejecting the remaining applicants. Money overpaid on
applications was employed on account of sum due on allotment. Ramesh, to whom 1,200 shares
were allotted, failed to pay the allotment money and on his subsequent failure to pay the first
call, his shares were forfeited. Mohan, the holder of 1,800 shares, failed to pay the two calls, and
his shares were forfeited after the second call. Of the forfeited shares, 2,400 shares were sold to
Krishna credited as fully paid @ 9 per share, the whole of Ramesh's shares being included. Pass
the necessary journal entries in the books of Primrose Ltd.
Your friend has recently joined Rosebud Ltd which is planning to redeem Preference Share
Capital of Rs. 15,00,000 at a premium of 10%. The company has securities premium Rs.
3,00,000; General Reserve Rs. 4,50.000. Your friend has asked your advice regarding this.
Calculate the amount of fresh issue of shares which Rosebud Ltd. is required to make as per
Section 55 of the Companies Act 2013. Also state the points which you will advise your friend to
keep in mind for redemption of preference shares to meet the legal requirements.
Answers
Answer:
ANSWER
In the books of X Ltd
Journal
Particulars
Dr.
Cr.
Bank A/c Dr.
1,44,800
To Share application A/c
1,44,800
(Being Application money received)
Share application A/c Dr.
1,44,800
To Share capital A/c
1,00,000
To Share allotment A/c
20,800
To Bank A/c
21,000
To Calls in advance A/c
3,000
(Being application money transferred)
OR
Share application A/c Dr.
1,44,800
To Share capital A/c
1,00,000
To Bank A/c
21,000
To Calls in advance A/c
23,800
(Being application money transferred)
Share allotment A/c Dr.
1,00,000
To Share capital A/c
1,00,000
(Being allotment money due)
Bank A/c Dr.
71,200
Calls in advance A/c Dr.
20,800
Calls in arrears A/c Dr.
8,000
To Share allotment A/c
1,00,000
(Being allotment money received)
Share capital A/c Dr.
20,000
To Share forfeiture A/c
12,000
To Calls in arrears A/c
8,000
(Being share forfeited)
Share Ist call A/c Dr.
1,35,000
To Share capital A/c
1,35,000
(Being amount due on first call)
Bank A/c Dr.
1,33,500
Calls in advance A/c Dr.
1,500
To Share Ist call A/c
1,35,000
(Being amount received on first call)
Share final call A/c Dr.
1,35,000
To Share capital A/c
1,35,000
(Being amount due on final call)
Bank A/c Dr.
1,33,500
Calls in advance A/c Dr.
1,500
To Share final call A/c
1,35,000
(Being amount received on final call)
Bank A/c Dr.
20,000
To Share capital A/c
20,000
(Being share reissue)
Share forfeiture A/c Dr.
12,000
To Capital reserve A/c
12,000
(Being amount transferred capital reserve)