Jay Ltd. issued a prospectus inviting application for 1,00,000 shares of R5-10 taul. TIISU Sul
were issued at par on the following terms:
On application Rs-2.50, on allotment Rs-2.50, on first call Rs-3 and on final call the balance.
Applications were received for 1,35,000 shares. Allotments were made on the following basis :
(a) To applicants for 25,000 shares in full.
(b) To applicants for 60,000 shares -- 45,000 shares.
(c) To applicants for 50,000 shares 30,000 shares.
All excess amount paid on application is to be adjusted against amount due on allotment.
The shares were fully called and paid-up except the amount of allotment, first call and final call not
paid by those who applied for 4,000 shares of the group applying for 50,000 shares.
All the shares on which calls were not paid were forfeited by the board of directors. 1,800 forfeited
shares were
Re-issued as fully paid on receipt of Rs-9 per share.
Pass necessary journal entries.
Answers
Journal Entries
Explanation:
Bank A/c …Dr. 337,500
To Share Application A/c 337,500
(Being Application money received on 135000 shares)
__________________________________________________________
Share Application A/c …Dr. 337,500
To Share Capital A/c 2,50,000
To Call in Advance A/c 87,500
(Being Out of 135000 shares 100000 allotted 0 shares rejected and remaining money transferred to calls in advance A/c)
__________________________________________________________
Share Allotment A/c …Dr. 2,50,000
To Share Capital A/c 2,50,000
(Being Allotment money due)
_________________________________________________________
Bank A/c …Dr. 1,60,500
Call in Advance A/c …Dr. 87,500
Calls in Arrears A/c …Dr. 2,000
To Share Allotment A/c 2,50,000
(Being Allotment money received and adjusted against call in advance but allotment money on 2400 shares pending)
__________________________________________________________
Share First Call A/c …Dr. 3,00,000
To Share Capital A/c 3,00,000
(Call money due on 1,00,000 shares)
__________________________________________________________
Bank A/c …Dr. 292,800
Calls in Arrears A/c …Dr. 7,200
To Share First Call A/c 3,00,000
(Received call money on 97,600 shares and call money on 2,400 shares pending)
__________________________________________________________
Share Final Call A/c …Dr. 2,00,000
To Share Capital A/c 2,00,000
(Call money due on 1,00,000 shares)
_________________________________________________________
Bank A/c …Dr. 1,95,200
Calls in Arrears A/c …Dr. 4,800
To Share First Call A/c 2,00,000
(Received call money on 97,600 shares and call money on 2,400 shares pending)
__________________________________________________________
Share Capital A/c ...Dr. 24,000
To Calls in arrears A/c 14,000
To Share Forfeiture A/c 10,000
(Forfeiture of 2,400 shares for non-payment of Allotment and First and Final Call money)
__________________________________________________________
Bank A/c ...Dr. 16,200
Share Forfeiture A/c ...Dr. 1,800
To Share Capital A/c 18,000
(Reissue of 1800 shares at Rs 9 per share)
__________________________________________________________
Share Forfeiture A/c ...Dr. 5,700
To Capital Reserve A/c 5,700
(Profit on re-issue transferred to Capital Reserve Account)