Question

(Pro-rata Allotment of Shares Issued at Premium, Non-Payment of Allotment and Calls, Forfeiture and Reissue).

A limited company issued a prospectus inviting applications for 2,000 shares of Rs.10 each at a premium of Rs.2 per share payable as follows:

On application Rs.2 per share

On allotment Rs.5 per share (including premium)

On 1st call Rs.3 per share

On 2nd call Rs2 per share

Application were received for 3,000 shares and allotment made pro-rata to the applicants of 2,400 shares, the remaining applications being refused. Money over-paid on application was employed on account of sums due on allotment. Rajesh, to whom 40 shares were allotted failed to pay allotment money and on his subsequent failure to the 1st call, his shares were forfeited. Madan, the holder of 60 shares, failed to pay the two calls and so his shares were also forfeited.

All these shares were sold to Kadam credited as fully paid for Rs.9 per share.

Show the Journal and Cash Book entries in the books of the company.

please also show the working notes.

Answer 1

Closing Stock was of ₹ 70,000 but its net realisable value was estimated at ₹ 60,000.

Hope it's help

Mark as brainliest ❤️

Follow me