“Lucky Ltd. invited applications for 50,000 equity shares of Rs. 10 each, payable as Rs. 2 on application, Rs. 3 on allotment and the balance on first and final call. Applications were received for 1,50,000 shares and the share were allotted on a pro-rata basis, The excess application money was to be adjusted against allotment only. Maya, a holder who had applied for 1,500 shares, failed to pay the call money and her share were forfeited and were reissued @ 8 per share as fully paid."
Q. 1 What amount of bank received by the Lucy Ltd.
Q. 2 What amount of Share capital will be shown in the balance sheet of Lucky Ltd.
Q. 3 What amount will be transfer to capital reserve account.
Answers
The journal entries will be -
- Bank A/c Dr. 300000
To, share application A/C 300000
( Being the application money received @ Rs. 2 per each)
- Share application A/C Dr. 300000
To, share capital A/C 100000
To, share allotment A/C 150000
To, bank A/C 50000
[Being the application money adjusted]
- Share allotment Dr. 150000
To, share capital A/C 150000
[Being the allotment money received]
- Share first & final call A/C Dr. 250000
To, share capital A/C 250000
[ Amount due on first & final call]
- Bank A/C Dr. 242000
Call in arrears A/C Dr. 7500
To, share first & final call A/C 250000
[ Being first & final call money received]
- Share capital A/C Dr. 150000
To, share forfeiture A/C 7500
To, call in arrears A/C 7500
[Forfeiture of share]
- Share forfeited A/C 4500
To, capital reserved A/C 4500
[Being amount transferred from share forfeited to capital reserve]
Thus,
Q1 - Amount received by bank - 300000
Q2 - Amount of share capital - 150000
Q3 - Amount of capital reserve - 4500