Question

p l. issue 400 shares of10each to suresh on which he has paid 3rs per share on applications but failed to pay allotment money of 3rs per share first callmoney of 2rs per share .his share were forfeited before making the final call.these ahare were later reissued at 8rs per share fully paid up

Answer 1

The Journal entries in the books of P ltd. are

Share application a/c Dr 1200
(400×3)

To Share capital a/c. 1200
(Being application amount due)

Bank a/c Dr. 1200

To share application a/c. 1200

(Being money recieved from the applicants)



Share Allotment a/c Dr 1200
(400×3)

To Share capital a/c. 1200

(Being share Allotment due)



Calls in arrears a/c Dr 1200

To Share Allotment a/c. 1200

(Being amount not recieved from the applicant)


Share first call a/c Dr 800
(400×2)

To Share capital a/c. 800

(Being share first call due)


Calls in arrears a/c Dr 800

To share first call a/c. 800

(Being amount not recieved from the applicant)


Share capital a/c Dr. 4000
(400×10)

To shares forfeited a/c 2000
(final call + application)

To share Allotment a/c 1200

To share first call a/c 800

(Being Shares forfeited on failing to pay amount in stipulated time)



Bank a/c Dr 3200
(400×8)
Shares forfeited a/c Dr 800
(B.f)

To Equity Share capital a/c 4000
(400×10)

(Being Shares reissued and recorded as fully paid)


Shares forfeited a/c. Dr. 1200

To Capital Reserve. 1200

(Being excess of Shares forfeited is transfered to capital reserve)