Q. 63. Modern Ltd. issued a prospectus inviting applications for 2,00,000 shares
of 710 each at a premium of 36 per share, payable as follows:
On Application
5 (including premium 2)
On Allotment
*5 (including premium *2)
On Ist Call
3 (including premium 1)
On IInd & Final Call 3 (including premium 1)
Applications were received for 2,60,000 shares and pro-rata allotment was made
to the applicants for 2,50,000 shares. Excess money paid on applications for these
shares was utilised towards allotment.
A, who applied for 1,000 shares, failed to pay the allotment money and his shares
were forfeited after allotment.
B, who applied for 1,500 shares, failed to pay the two calls and his shares were
also forfeited.
Of the shares forfeited, 1,800 shares were re-issued as fully paid up for 15 per
share, the whole of B's share being included. Prepare Cash Book and Journal.
Answers
Explanation:
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Answer:
The correct answer is 9750 shares.
Explanation:
What are journal entries?
Issued shares: 2,00,000
Applied shares: 2,60,000
out of 2,60,000 shares, 2,00,000 shares will be on pro rata allotment.
Journal entries:
(A)
Share application A/C Dr 13,00,000
Share capital A/C Cr 6,00,000
SPR A/C Cr 4,00,000
Share allotment A/C Cr 2,50,000
Bank A/C Cr 50,000
(B)
Share allotment A/C Dr 10,00,000
Share capital A/C Cr 6,00,000
SPR A/C Cr 4,00,000
(C)
Calls in arrears A/C Dr 3000
Share allotment A/C Cr 3000
(D)
Share Capital A/C Dr 4800
SPR A/C Dr 1600
Share forfeiture A/C Cr 3400
Calls in arrears A/C Cr 3000
(E)
Share 1 A/C Dr 597600
Share capital A/C Cr 398400
SPR A/C Cr 199200
(F)
Calls in arrears A/C Dr 3600
Share 1 A/C Cr 3600
(G)
Share 2 A/C Dr 597600
Share capital A/C Cr 398400
SPR A/C Cr 199200
(H)
Calls in arrears A/C Dr 3600
Share 2 A/C Cr 3600
Balance of cashbook: 3212000
Working note:
7200 x 1200/1200= 7200
3400 x 600/800= 2550
A+B = 9750 capital shares
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