Over-Subscription and Forfeiture of Shares
0. 109. X Ltd. invited applications for issuing 5,00,000 equity shares of 210 each
at par. The amount per share was payable as follows:
On Application 1 per share
On Allotment 2 per share
On First call *3 per share
On Second and Final Call — Balance.
Applications for 8,00,000 shares were received. Applications for 1,00,000 shares
were rejected and pro-rata allotment was made to the remaining applicants. Excess
money received with applications was adjusted towards sums due on allotment. All
calls were made. Ashok, a shareholder holding 5,000 shares failed to pay the allotment
and the call money. Mohan, a shareholder who had applied for 7,000 shares, failed to
pay the first and second and final call. Shares of Ashok and Mohan were forfeited after
the second and final call. Of the forfeited shares 8,000 shares were re-issued at *12 per
share fully paid up. The re-issued shares included all the forfeited shares of Ashok.
Pass necessary journal entries for the above transactions in the books of X Ltd.
(C.B.S.E. 2018 Comptt.)
Answers
Answer:
bank A/C.... dr. 8,00,000
to share app 8,00,000
share app 8,00,000
to share cap 5,00,000
to share allotment 2,00,000
to bank 1,00,000
share all 10,00,000
to share capital 10,00,000
bank 7,98,000
calls in arrears 8000
to share all 8,00,000
share first call 15,00,000
to share capital 15,00,000
bank 14,70,000
calls in arrears 30,000
to share first call 15,00,000
share final call 20,00,000
to share capital 20,00,000
bank 19,60,000
calls in arrears 40, 000
to share final call 20,00,000
share capital (10, 000 × 10) 1,00,000
to share forfeiture 22,000
to share all 8000
to share first call 30,000
to share final call 40,000
bank (8000 × 12) 96,000
to share capital (8000 × 10) 80,000
to security premium reserve (8000 × 2) 16,000
share forfeiture.... dr. 16,000
to capital reserve 16,000
ashok = 7000 + 9000 = 16,000
MOHAN :->
forfeiture : amount
5000 : 15,000 --> 1:3
3000 : ?
3000×3/1 = 9000