Question

17 Raunak Cotton Ltd. issued a prospectus inviting applications for 12,000 equity shares of Rs.10 each at a premium of Rs.2 per shares, payable as follows:

On application Rs.2

On allotment Rs.5 [including premium]

On first call Rs.3

On final call Rs.2

Applications were received for 15,000 shares and allotted to all applicants on pro rata basis. Money received in excess on the application was adjusted toward the amount due on allotment.

All calls were made.Manu who has applied for 300 shares failed to pay the amount due on allotment and calls respectively. Madhur who was allotted 240 shares failed to pay the first and final call. Shares of both Manu and Madhur were forfeited. The forfeited shares were rissued at Rs.9 per share as fully paid –up.

Give journal entries in the books of the company. 8​

Answer 1

Answer:

working notes...

issued 12000

FV..10

p..2

app 2

allot 3+2

first call 3

final call 2

app.received... 15000

and excess money adjusted on pro rata basic

manu shareholders..applied 300 shares but failed to pay allotments money

madhur alloted 240 shares and failed to first and final call. his shares were forfeitures.

reissue 9 per shares as fully paid up

entries

bank a/c..(15000*2)-dr....30000

. to share app a/c.... 30000

shre app a/c... 30000

. to share capital(12000*2). 24000

. to share allotments (12000*3). 6000

share allotments a/c..dr (12000*5). 60,000

. to share capital(12000*3).... 36000

. to SPR a/c... (12000*2)..... 24000

bank a/c..(60000-6000-1500).... 52500

. to sahre allotments a/c... 52500

share first call a/c....(12000*3). 36000

. to share cap. 36000

bank a/c...(36000-720). 35280

. to share first call. 35280

share final call a/c..(12000*2).....24000

. to share capital. 24000

bank a/c...(24000-720). 23280

. to share final call. 23280

share capital (240*10). 2400

to share forfeitures a/c.. 1200

to share first call a/c..240*3. 720

to final call a/c...240*2. 480

bank a/c...(540*9). 4860

share forfeitures. 540

. to share capital (540*10) 5400

forfeitures share a/c.. 660

to capital reserves. 660

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