Arjun Ltd. Invited application for 50,000 equity shares of Rs. 10 each at a premium of 10% payable along with the allotment. The amounts were payable as follows: (8)
On Application Rs. 4 per share.
On Allotment Rs. 4 per share (including premium)
On First and Final call- balance
Applications for 70,000 shares were received of which 10,000 shares were rejected and the remaining applicants were given pro-rata allotment. Excess application money was applied towards sum due on allotment.
Arvind to whom 1,500 shares were allotted failed to pay the allotment money. His shares were forfeited immediately after allotment. The forfeited shares were reissued @ 8 per share as fully paid up. Afterwards the final call was made. Ritu who applied for 1800 shares failed to pay the final call. Her shares were also forfeited and afterwards reissued @ 9 per share fully paid up. Journalise the above transactions.
Answers
Answer:
full amount (50, 000×3 = 1,50,000) is receivable because we've already reissued shares in between the installments.
please check the attachment
Following are the journal entries for this question:
1. Bank a/c dr. 2,80,000
to equity share capital a/c 2,80,000
(being money received on application)
2. Equity share application a/c dr. 2,80,000
to equity share capital a/c 2,00,000
to equity share allotment a/c 40,000
to bank a/c 40,000
(being application money transferred)
3. Equity share allotment a/c dr. 2,00,000
to equity share capital a/c 1,50,000
to securities premium reserve a/c 50,000
( being allotment money due)
4. Bank a/c dr. 1,55,200
calls-in-arrears a/c dr. 4,800
to equity share allotment a/c 1,60,000
(being allotment money received)
5. Equity share capital a/c 10,500
security premium reserve a/c 1,500
to share forfeiture a/c 7,200
to equity share allotment a/c 4,800
(being shares forfeited)
6. Bank a/c dr. 12,000
share forfeiture a/c dr. 3,000
to equity share capital a/c 15,000
(being shares reissued)
7. Share forfeiture a/c dr. 4,200
to capital reserve a/c 4,200
(being amount transferred to capital reserve)
8. Equity share final call a/c dr. 1,50,000
to equity share capital a/c 1,50,000
(being share final call due)
9. Bank a/c dr. 1,45,500
calls-in-arrears a/c dr. 4,500
to equity share capital a/c 1,50,000
(being final call money received)
10. Equity share capital a/c dr. 15,000
to share forfeiture a/c 10,500
to equity share final call a/c 4,500
(being shares forfeited)
11. Bank a/c dr. 13,500
share forfeiture a/c dr. 1,500
to equity share capital a/c 15,000
(being shares reissued)
12. Share forfeiture a/c dr. 9,000
to capital reserve a/c 9,000
(being amount transferred to capital reserve)