- D Limited invited application for 2,00,000 shares of 10 each. These shares were issued at premium of 11 cach which was allowed at the time of allotment. All money was called and duly received except on 10,000 shares on which only application money of 3 per share was received. The company forfeited all the shares. 7000 of forfeited share where re-issued at 213 per share. State the amount of securities premium to be shown under the head-Reserve and surplus.
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Answer:
Explanation:
ssued 1,000 equity shares of Rs 10 each
Applied 1,800 shares
Allotment made
as:
Amount payable per shares as:
Applied Allotted Application Rs 3
40,000 30,000 Allotment Rs 4
35,000 20,000 First Call Rs 3
1,800 1,000 Rs 10
Books of XYZ Limited
Journal Entries
Date Particulars L.F.
Debit
Amount
Rs
Credit
Amount
Rs
Bank A/c Dr. 2,25,000
To Equity Share Application A/c 2,25,000
(Share application money received for 75,000 shares
at Rs 3 each)
Equity Share Application A/c Dr. 2,25,000
To Equity Share Capital A/c 1,50,000
To Equity Share Allotment A/c 75,000
(Application money of 50,000 shares transferred to
share capital and the remaining amount adjusted on
allotment)
Equity Share Allotment A/c Dr. 2,00,000
To Equity Share Capital A/c 2,00,000
(Share allotment due on 50,000 shares at Rs 4 each)
Bank A/c Dr. 1,21,400
To Equity Share Allotment A/c 1,21,400
(Share allotment received on 48,800 shares after
adjusting the excess money on application)
Equity Share Capital A/c (1,200 × Rs 7) Dr. 8,400
To Share Forfeiture A/c 4,800
To Equity Share Allotment A/c 3,600
(1,200 shares of Rs 10 each Rs 7 called-up forfeited
for the non-payment of allotment)
Equity Share First and Final Call A/c Dr. 1,46,400
To Equity Share Capital A/c 1,46,400
(First and final call due on 48,800 shares at Rs 3 each)
Bank A/c Dr. 1,45,200
To Equity Share First and Final Call A/c 1,45,200
(Share first and call received 48,800 shares at Rs 3
each)
Equity Share Capital A/c Dr. 4,000
To Share Forfeiture A/c (400 × Rs 7) 2,800
To Equity Shares First and Final Call A/c 1,200
(400 shares forfeited for the non-payment of first
and final call)
Bank A/c Dr. 8,000
Share Forfeiture A/c Dr. 2,000
To Equity Share Capital A/c 10,000
(1,000 shares of Rs 10 each re-issued at Rs 8 per
share fully paid-up)
Share Forfeiture A/c Dr. 3,200
To Capital Reserve A/c 3,200
(Balance of 1,000 re-issued shares in Share Forfeiture
Account transferred to Capital Reserve Account)
Working NotesRumu’s Share
Number of shares applied =
Money received on Application 1,600 shares × Rs 3 = Rs. 4800
Money adjusted on Application 1200 shares × Rs 3 = Rs. 3600
Excess on Application Rs. 1200
Allotment due on 1,200 shares × Rs 4 = 4800
Less: Excess money on Application 1200
Calls-in-Arrears on Allotment 3600
Share Allotment
Share Allotment due 50,000 shares × Rs 4 = 200000
Less: Excess money on application 75000
125000
Less: Calls-in-Arrears on Allotment 3600
Money received on Allotment 121400
Shamu’s Shares
Number of shares allotted to Shamu=
First and Final Call
First and Final Call due; 48,800 shares × Rs 3 = 1,46,400
Less: Calls-in-Arrears by Shamu; 400 shares ×
Rs 3
= 1,200
Money received on of First and Final Call 1,45,200
Capital Reserve
Shares re-issued out the shares forfeited from Ramu = 1,000 shares − Shamu’s shares
= 1,000 − 400
= 600 shares
on re-isssue Ramu’s shares:
Capital Reverse on re-issue of 600 shares forfeited from Ramu
Share Forfeiture Cr. = Rs 4
Share Forfeiture Dr. = Rs 2
Share Forfeiture after re-issued Rs 2 per share
Capital Reserve after re-issue of 600 shares = Share Forfeiture after re-issue (per share) × 600 shares
= Rs 2 × 600
= Rs 1,200
on re-isssue Shamu’s shares:
Share Forfeiture Cr. Rs 7
Share Forfeiture Dr. Rs 2
Share Forfeiture after re-issue Rs 5 per share
Capital Reserve after re-issue of 400 shares = Share Forfeiture after re-issue (per share) × 600 shares
= Rs 5 × 400
= Rs 2,000
Total amount of Capital Reserve = Capital Reserve of 600 shares + Capital Reserve of 400 shares
Total amount of Capital
Reserve
= Capital Reserve of 600 shares + Capital Reserve of
400 shares
= Rs 1,200 +2000=3200
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