Question

Jeevan Dhara Ltd. invited applications for issuing 1,20,000 equity shares of ₹ 10 each at a premium of ₹ 2 per share. The amount was payable as follows:
Applications for 1,50,000 shares were received. Shares were allotted to all the applicants on pro rata basis. Excess money received on applications was adjusted towards sums due on allotment. All calls were made. Manu who had applied for 3,000 shares failed to pay the amount due on allotment and first and final call Madhur who was allotted 2,400 shares failed to pay the first and final call. Shares of both Manu and Madhur were forfeited. The forfeited shares were reissued at ₹ 9 per share as fully paid-up.
Pass necessary journal entries for the above transactions in the books of Jeevan Dhara Ltd.

Answer 1

The necessary journal entries for the given transactions in the books of Jeevan Dhara Ltd are prepared below:

Explanation:

Calculation of amount not received on Allotment and First and Final Call money

Shares Alloted to Manu

$=\frac{1,20,000}{1,50,000} \times 3,000=2,400 \quad shares$

Amount received on 3,000 shares of Rs.2 each

$=(3,000 \times 2)=\mathrm{Rs} .6,000$

Amount transferred to Share Capital Account

$=(2,400 \times \mathrm{Rs} .2)=\mathrm{Rs} .4,800$

Excess application money received

$=\mathrm{Rs} .1,200$

Allotment money due @ Rs.5 each

$=(7,200+4,800)=\mathrm{Rs} .12,000$

Not received on allotment

$=(7,200-1,200)=\mathrm{Rs} .6,000$

Securities Premium not received

$=\mathbf{R} \mathbf{s} .4,800$

First and final call money not received

$=(2,400 \times \mathrm{Rs} .5)=\mathrm{Rs} .12,000$

Calculation of amount not received from Madhur

First and final call money not received

$=(2,400 \times \mathrm{Rs} .5)=\mathrm{Rs} .12,000$