(OD
Janta Ltd. issued applications for 5,00,000 equity shares of * 10 each, at a premium of 4 per share. The
amount was payable as follows:
On application 6 (including *2 premium), on Allotment 6 (including 2 premium) and Balance on first
The amo
and final call.
Applications for 7,50,000 shares were received. Allotment was made to all the applicants on pro rata
basis. Mohan to whom 1,000 shares were allotted did not pay allotment and call money. Vikram to whom
500 shares were allotted, did not pay the call money. These shares were forfeited and afterwards reissued
@ 8 per share fully paid-up. Pass the necessary Journal entries.
Answers
Answer:
Shares issued= 5,00,000 price=10+4=`14
Appl= 6(4+2), allot= 6(4+2), I & final call= 2
Appl received= 7,50,000
Mohan
Allotted shares=1,000, did not pay allot, call
Applied shares= 7,50,000/5,00,000*1,000= 1,500 sahres
Appl money paid by Mohan = 1500*6= 9,000
Appl money required = 1,000*6=6,000
Excess = 3,000
Allot due = 1,000*6=6,000(4,000+2,000)
(-) excess 3,000
Money not paid on allot = 1,000+2,000
Vikram
Allotted shares=500, did not pay call
Applied shares= 7,50,000/5,00,000*500= 750 shares
Appl money paid by Vikram= 750*6= 4,500
Appl money required = 500*6=3,000
Excess = 1,500
Allot due = 500*6(500*4+500*2)(2,000+1,000)
(-) excess =1,500
Remaining Rs 1,500 has been paid by Vikram himself, as it is written in the question that he has not paid call money. It means allotment has been paid in full.
1. Bank dr (750000*6) 45,00,000
To share appl 4500000
2. Share appl dr 4500000
To share capital (500000*4) 20,00,000
To sec prem res ( 5,00,000*2) 10,00,000
To share allot 15,00,000
3. Share allot dr ( 5,00,000*6) 30,00,000
To share capital(5,00,000*4) 20,00,000
To sec prem res (5,00,000*2) 10,00,000
4. Bank 14,97,000
Call in arrear dr 3,000
To share allot ( 30,00,000-15,00,000) 15,00,000
5. Share I & final call dr (5,00,000*2) 10,00,000
To share capital 10,00,000
6. Bank dr 9,97,000
Call in arrear dr ( 2,000+1,000) 3,000
To share I & final call 10,00,000
7. Share capital dr (1,000*10) 10,000
Sec prem res dr (1,000*2) 2,000
To share forfeiture (1,500*6-2,000) 7,000
To share allot 3,000
To share call 2,000
(2,000 is prem on 1,000 alloted shares that has been credited to sec prem a/c)
8. Bank dr (1,000*8) 8,000
Share forfeiture 2,000
To share capital (1,000*10) 10,000
9. Share capital dr (500*10) 5,000
To share forfeiture (750*6-1,000+500 ) 4,000
To share call 1,000
(1,000 is prem on 500 shares transferred to sec prem res. 500 is amt paid by him on allotment apart from adjusted from excess application money)
10. Bank dr (500*8) 4,000
Share forfeiture 1,000
To share capital (500*10) 5,000
11. Share forfeiture dr 8,000(5,000+3,000)
To capital reserve 8,000
Explanation:
Concept
Journal is a book in which transaction is recorded first time and after this ledger accounts are prepared.
To find
Make journal entries of Janta Ltd.
Explanation
Journal entries going to be as under:
1) Bank A/c Dr. 4500000
To Equity share application A/c 4500000
(Application money received)
2) Equity Share application a/c dr. 4500000
To Equity share capital a/c 2000000
To Securities Premium Reserve A/c 1000000
To Equity share allotment a/c 1500000
(Application due)
3) Equity share allotment a/c dr. 3000000
To equity share capital a/c 2000000
To Securities premium reserve a/c 1000000
( Allotment due)
4) Bank a/c dr. 1498500
To share allotment a/c 1498500
(Allotment money received)
5) Equity share first and final call a/c dr. 100000
To equity share capital a/c 100000
(first and final call due)
6) Bank a/c dr. 97000
To equity share first and final call a/c 97000
(first and final call received)
7) Equity share capital a/c dr. 15000
Securities premium reserve a/c dr. 2000
To share forfeiture a/c 11000
To Equity share allotment a/c 3000
To share first & final call a/c 3000
(Forfeiture of shares)
8) Bank a/c dr 12000
share forfeiture a/c dr. 3000
to equity share capital a/c 15000
9) Share forfeiture a/c dr. 8000
To capital reserve a/c 8000
(Transfer to capital reserve)
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