Kamal Ltd. was formed on 1st April, 2010 with an authorised capital of ₹ 2,00,000, divided into 2,000 Equity Shares of ₹ 100 each. 1,000 shares were issued as fully paid to the vendors of building for payment of the purchase consideration. The remaining 1,000 shares were offered or public subscription at a premium of ₹ 5 per share payable as:
Applications were received for 900 shares which were duly allotted and the allotment money was received in full. At the time of the first call, a shareholder who held 100 shares failed to pay the first call money and his shares were forfeited. These shares were reissued @ ₹ 60 per share, ₹ 70 per share paid-up.
Final call has not been made.
You are required to
(i) give necessary journal entries to record the above transactions and
(ii) show how share capital would appear in the Balance Sheet of the company.
Answers
Answer:
150 shares of ₹ 10 each issued at a premium of ₹ 4 per share payable with allotment were forfeited for non-payment of allotment money of ₹ 8 per share including premium. The first and final call of ₹ 4 per Pass Journal entries in the books of X Ltd. for the above
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The necessary journal entries are calculated and prepared below:
Explanation:
Authorised Capital 2,000 equity Shares at 100 each
Issued Capital
1,000 Equity Shares at 100 each to the vendor of the building
1,000 equity Shares at 100 each with a premium 5 to the public
Applied by Public : 900 equity Shares
Payable as:
On Application - Rs. 10
On Allotment (20+5) - Rs. 25
On First Call - Rs. 40
On Called - up (70+5) - Rs. 75
On Final Call - Rs. 30
Called-up (Total) (100+5) - Rs. 105
Calculation of Capital Reserve
Capital Reserve
=Share Forfeiture Cr. (at the time of forfeiture) - Share forfeiture Dr. (at the time of re-issue)
