Konark Ltd. invited applications for issuing 3,00,000 shares of 10 each.The amount per share was payable as follows: 3 on application, 3 on
allotment, and 4 on first and final call.
The company received applications for 4,00,000 shares. Allotment was
done as follows:
Applicants of 2,40,000 shares were allotted 2,00,000 shares.
(ii)
Applicants of 1,20,000 shares were allotted 80,000 shares.
(iii) Remaining applicants were allotted 20,000 shares.
Money overpaid on applications was adjusted towards sums due on
allotment. Divij, a shareholder, belonging to group (ii), who had applied
for 6,000 shares, failed to pay allotment and call money. Faisal, another
shareholder, who was allotted 10,000 shares, paid the call money along
with allotment. Faisal belonged to group (i),
Divij's shares were forfeited after the first and final call. Half of the
forfeited shares were reissued @ * 10 per share fully paid.
Pass the necessary journal entries to record the above transactions
Answers
Books of Konark Ltd.
Particulars Debit Credit
Bank A/c Dr. 12,00,000
To Share Application A/c 12,00,000
(Being application money on 4,00,000 shares received)
Share Application A/c Dr. 12,00,000
To Share Capital A/c 9,00,000
To Share Allotment A/c 3,00,000
(Being the transfer of application money, to share capital account, and Share allotment A/c)
Share Allotment A/c Dr. 9,00,000
To Share Capital A/c 9,00,000
(Allotment money due)
Bank A/c Dr. 6,34,000
Calls in Arrears A/c Dr. 6,000
To Share Allotment A/c 6,00,000
To Calls in Advance 40,000
(Being allotment money received)
Share First & Final call A/c Dr. 12,00,000
To Share Capital A/c 12,00,000
(Share First & Final Call money due)
Bank A/c Dr. 11,44,000
Calls in arrears A/c Dr. 16,000
Calls in advance A/c Dr. 40,000
To Share Capital A/c 12,00,000
(Share First & Final Call money received)
Share Capital A/c Dr. 40,000
To Share Forfeiture A/c 18,000
To Calls in Arrears A/c 22,000
(Divij’s Share forfeited for non-payment of allotment money and First & Final Call money)
Bank A/c Dr. 20,000
To Share Capital A/c 20,000
(Being 50% shares of Divij re-issued @ 10 per share fully paid)
Share Forfeiture A/c Dr. 9,000
To Capital Reserve A/c 9,000
(Being excess amount received on 50% shares forfeiture adjusted to capital reserve)