Question

Raghav Ltd. issued a prospectus inviting applications of 50000 equity shares of ₹ 10 each at a premium of ₹ 4 per share payable as follows
Application ₹5 (including ₹2 premium)
Allotment ₹5 ( including ₹2 premium)
First and final call ₹4
Applications were received for 90000 shares and prorata allotment was made to be appliance of 75000. The remaining applications were rejected. It was decided to utilise the excess application money towards some due on allotment.
Ritu who applied for 1800 shares failed to pay the allotment money due and her shares were Forfieted immediately after allotment.
Manju who was alloted 1200 shares failed to pay the call money and subsequently her shares were Forfieted. The directors decided to reissue 50% of Forfieted shares held by Ritu for ₹12 per share and 50% of Forfieted shares held by Manju for ₹ 9 per share.​

Answer 1

Answer:

good question of issue of share with forfieture and reissue

Answer 2

Journal Entry in the books of Raghav Ltd.

1. Bank a/c Dr                                            450000

       To Share Application a/c                                450000

  (Being share application money received)

2. Share Application a/c Dr                      450000

        To Share Capital a/c                                       150000

        To Bank a/c                                                      75000

        To Share allotment a/c                                   125000

        To Security Premium a/c                                100000

  (Being share application money transferred to share capital a/c and pro-rata made)

3. Share Allotment a/c Dr                         250000

        To share capital a/c                                        150000

        To security premium a/c                                 100000

  (Being share allotment money transferred to share capital a/c)

4. Bank a/c Dr                                            122000

   Calls in arrear a/c Dr                                 3000

        To share allotment a/c                                   125000

  (Being share allotment money received)

5. Share Capital a/c Dr                                  7200

   Security Premium a/c Dr                           2400

         To calls in arrear a/c                                      3000

         To share forfeiture a/c                                   6600

  (Being calls in arrear made)

6. Share first and final call a/c Dr              195200

         To share capital a/c                                       195200

  (Being share first and final call money transferred to share capital a/c)

7. Bank a/c Dr                                             190400

   Calls in arrear a/c Dr                                  4800

        To Share first and final call a/c                      195200

  (Being share first and final call money received after adjustment of calls in arrear)

8. Share Capital a/c Dr                                 12000

        To Calls in arrear a/c                                      4800

        To share forfeiture a/c                                    7200

  (Being share forfeited)

9. Bank a/c Dr                                                 7200

        To security premium a/c                                 1200

        To share capital a/c                                         6000

  (Being share re-issued at premium)

10. Bank a/c Dr                                              5400

     Share forfeiture a/c Dr                              600

         To Share capital a/c                                       6000

   (Being share re-issued)

11. Share forfeiture a/c Dr                             6300

         To Capital Reserve a/c                                  6300

   (Being share forfeited money transferred to capital reserve a/c)

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