On January 1, 2015, the Director of X Lid, issued for public subscription 50,000 equity shares of Rs. 10 each at Rs. 12 per share payable as to Rs. 5 on application Oncluding premium), Rs. 4 on allotment and the balance on call on May 01. 2015. The lists were closed on February 10, 2015 by which date applications for 70,000 shares were received, or the cash received Rs. 40,000 was returned and Rs.50,000 was applied to the amount due on allotment, the balance of which was paid on February 16, 2015 All the shareholders paid the call due on May 01, 2015 with the exception of an allottee of 500 shares. These shares were forfeited on September 29, 2015 and reissued as fully paid at Rs. 8 per share on November 01, 2015. The company, as a matter of policy does not maintain a calls-in-arrears account Give journal entries to record these share capital transactions in the books of X Lid.
Answers
February 10, 2015
Cash returned = Rs.40,000 at the rate of 5 = Applicants for 8,000 shares
Transferred to Share Allotment Rs.50,000 @ 5 per share = 10,000 shares
Pro-rata ratio = 6: 5
Balance 2000 share money @ Rs.5 per share = Rs.10,000 paid on February 16, 2015
Total Share = 50,000
Application = Rs.3 + Rs.2 premium,
Allotment = Rs. 4
First & Final Call = Rs.3 on May 01. 2015
Exception Allottee of 500 shares did not pay call money.
Forfeited on September 29, 2015
Reissued as fully paid at Rs. 8 per share on November 01, 2015
Journal Entries in the books of X Ltd.
Date Particulars Debit Credit
February 10, 2015 Bank A/c Dr. (70,000 x 5)
To Share Application A/c (70,000 x 5)
(Application money received for 70,000 shares) 3,50,000
3,50,000
February 10, 2015 Share Application A/c Dr. (68,000 x 5)
To Share Capital A/c (50,000 x 3)
To Securities Premium A/c (50,000 x 2)
To Share Allotment A/c (50,000 x 1)
To Bank A/c (8,000 x 5)
(Application money due transferred to Share Capital, Securities premium, Share Allotment A/c and money returned for 8000 shares) 3,40,000
1,50,000
1,00,000
50,000
40,000
February 16, 2015 Share Application A/c Dr. (2,000 x 5)
To Bank A/c (8,000 x 5)
(Balance Application money on 2000 shares returned) 10,000
10,000
Share Allotment A/c Dr. (50,000 x 4)
To Share Capital A/c (50,000 x 4)
(Allotment due) 2,00,000
2,00,000
Bank A/c Dr. (50,000 x 3)
To Share Allotment A/c (50,000 x 3)
(Allotment Money Received) 1,50,000
1,50,000
May 01. 2015 Share First & Final call A/c Dr. (50,000 x 3)
To Share Capital A/c (50,000 x 3)
(First & Final call due) 1,50,000
1,50,000
May 01. 2015 Bank A/c Dr. (49,500 x 3)
To Share First & Final call A/c (49,500 x 3)
(Call money received on 49,500 shares) 1,48,500
1,48,500
September 29, 2015 Share Capital A/c Dr. (500 x 10)
To Share First & Final call A/c (500 x 3)
To Share Forfeiture A/c (500 x 7)
(500 Shares Forfeited) 5,000
1,500
3,500
November 01, 2015 Bank A/c Dr. (500x8)
Share Forfeiture A/c Dr. (500x2)
To Share Capital A/c (500x10)
(500 shares reissued at Rs.8 as fully paid) 4,000
1,000
5,000
November 01, 2015 Share Forfeiture A/c Dr. (500 x 5)
To Capital Reserve A/c (500 x 5)
(Share Forfeiture amount transferred to Capital Reserve) 2,500
2,500
