Question

68. Suzuki Limited issued a prospectus inviting applications for 60,000 shares
210 each at a premium of 30% payable as follows: On Application <3,50, On
Allotment 5.50 (including premium) : On First Call 82 and on Second Call 22.
Applications were received for 95,000 shares and allotment was made pro-rata to
applicants of 80,000 shares. Money over-paid on applications were employed on
account of sums due on allotment,
X, to whom 1,500 shares were allotted failed to pay the allotment money and on
his subsequent failure to pay the First Call his shares were forfeited. Y, the holder of
2,400 shares failed to pay the two calls and his shares were forfeited after the Second
Call. Of the shares forfeited, 3,000 shares were sold to Z as fully paid, Z paying 88,50
per share, the whole of Y's share being included.
Give journal entries and prepare Bank Account.

Answer 1

Answer:

cash receive on allotment 253500

balance of share forfeiture account 4200

Capital Reserve 12700

securities premium reserve 175500

cash at Bank 783400