A Ltd. Invited applications for 10,000 shares of Rs.100 each at a discount of 5% payable as follows: On application - Rs.25 On allotment - Rs.34 On first & final call - Rs.36 Applications were received for 9,000 shares and all of these were accepted. All moneys due were received except the first and final call on 100 shares which were forfeited. Of the forfeited shares, 50 shares were reissued at the rate of Rs.90 as fully paid. Show necessary journal entries in the book of the company.
Answers
Answer:
JOURNAL ENTRIES IN THE BOOKS OF A ltd
(000) (000)
Particulars amount amount
Bank a/c Dr 225
To share application a/c 225
Share application a/c Dr 225
Discount on application a/c Dr 45
To shares capital a/c 270
Share allotment a/c Dr 306
To share capital a/c 306
Bank a/c Dr 306
To share allotment a/c 306
Share 1st & final call a/c Dr 324
To share capital a/c 324
Bank a/c Dr 32.4
calls in arrears a/c Dr 3.6
To share 1st & final call a/c 324
Share capital a/c Dr 10
To discount on shares a/c 0.5
To calls in arrears a/c 3.6
To share forfieted a/c 5.9
Bank a/c Dr 4.5
Share forfieted a/c Dr 0.5
To share capital a/c 5
Shares forfeited a/c Dr 1.55
To capital reserve a/c 1.55
note:
Amount transferred to capital reserve=
value of shares forfieted 2950(5900/100 × 50)
value of shares reissued 4500(50 × 90)
so, amount transferred to capital reserve
= 4500 - 2950 = 1550.
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