Question

Himalaya Company Limited issued for public subscription 1,20,000 equity shares of ₹ 10 each at a premium for ₹ 2 per share payable as under:
Applications were received for 1,60,000 shares. Allotment was made on pro rata basis. Excess money on application were adjusted against the amount due on allotment.
Rohan to whom 4,800 shares were allotted failed to pay for the two calls. These shares were subsequently forfeited after the second call was made. All the shares forfeited were reissued to Teena as fully paid at ₹ 7 per share.
Record journal entries and show the transactions relating to share capital in the company’s Balance Sheet.

Answer 1

The journal entries and the transactions relating to share capital in the company’s Balance Sheet are prepared below:

Explanation:

Calculation of Share Capital

Authorized Share Capital

• Share of Rs. 10 each

Issued share Capital

• 1,20,000 share of Rs. 10 each

Total = Rs. 12,00,000

Subscribed, Called-up and paid-up Share Capital

• 1,20,000 Share of Rs. 10 each

Total = Rs. 12,00,000

Calculation of Other Non-Current Assets

• Securities Premium - Rs. 2,40,000
• Capital Reserve  - Rs. 14,400

Total = Rs. 2,54,400

Calculation of Cash and Cash Equivalents

• Cash at Bank - Rs. 14,54,400