ARti Limited invited applications for issuing 80,000 shares of Rs. 10 each at a premium of Rs. 4 per share. The amount was payable as follows :
On Application - Rs. 5 per share
On Allotment - Rs. 9 per share (Including Premium)
Applications were received for 1,40,000 shares.
Allotment was made on the following basis:
(i) To applicants for 80,000 shares - 60,000 shares
(ii) To applicants for 60,000 shares - 20,000 shares
Money overpaid on applications was utilized towards sum due on allotment.
Rajiv, who had applied for 1,200 Shares failed to pay his dues and his shares were forfeited.
Pass journal entries in the books of Arti Limited to record the above transactions.
Answers
Answer:
share forfeiture 6000
Explanation:
720000 minus 280000 ALLOTMENT paid minus Call in arrear 6600= 433400
Answer:
ARti Limited invited applications for issuing 80,000 shares of Rs. 10 each at a premium of Rs. 4 per share.
Explanation:
Bank A/c Dr7,00,000 To Equity Share Application A/c7,00,000(Being application money received) ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––Equity Share Application A/c Dr7,00,000 To Equity Share Capital A/c4,00,000 To Equity Share Allotment A/c2,80,000To Bank A/c 20,000(Being application money adjusted) ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––Equity Share Allotment A/c Dr7,20,000 To Equity Share Capital A/c4,00,000 To Securities Premium Reserve A/c3,20,000(Being allotment money due) –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––Bank A/c Dr4,33,400Calls in Arrears A/c Dr6,600 To Equity Share Allotment A/c4,40,000(Being allotment money received except on 900 shares of Rajiv) ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––Equity Share Capital A/c Dr9,000Securities Premium Reserve A/c Dr3,600 To Calls in Arrears A/c6,600 To Share Forfeiture A/c6,000(Being 900 shares of Rajiv forfeited) ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––Bank A/c Dr10,800To Equity Share Capital A/c 9,000 To Securities Premium Reserve A/c1,800(Being forfeited shares re-issued at Rs 12) ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––Share Forfeiture A/c Dr
6,000
To Capital Reserve A/c 6,000
(Being profit on re-issue transferred to Capital Reserve)
On Application of 80,000 shares, 60,000 shares were allotted.
Therefore, on 80,000 shares application money received = 80,000 ×5 = Rs 4,00,000
Amount adjusted on Application = 60,000 × 5 = Rs 3,00,000
Excess money adjusted on Allotment = Rs 1,00,000
On Application of 60,000 shares, 20,000 shares were allotted.
Therefore, on 60,000 shares application money received = 60,000 ×5 = Rs 3,00,000
Amount adjusted on Application = 20,000 ×5 = Rs 1,00,000
Excess money = Rs 2,00,000
Amount adjusted on Allotment = 20,000 × 9 = Rs 1,80,000
Since there is no further stage hence balance amount will be refunded Rs 20,000
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