Question

Raunak Cotton Ltd. issued a prospectus inviting applications for 6,000 equity shares of Rs 100 each at a premium of Rs 20 per shares, payable as follows: On application Rs 20 On allotment Rs 50 (including premium) On first call Rs 30 On final call Rs 20 Applications were received for 10,000 shares and allotment was made Pro-rata to the applicants of 8,000 shares, the remaining applications Being refused. Money received in excess on the application was adjusted toward the amount due on allotment. Rohit, to whom 300 shares were allotted failed to pay allotment and calls money, his shares were forfeited. Itika, who applied for 600 shares, failed to pay the two calls and her share were also forfeited. All these shares were sold to Kartika as fully paid for Rs 80 per shares. Give journal entries in the books of the company.

Answer 1

Answer:

Explanation:

1. Bank A/c  Dr.  2,00,000

To Share Application A/c  2,00,000

(Share Application money received on 10,000 shares)

2. Share Application A/c  Dr. 2,00,000

To Share Capital A/c   1,20,000

To Share Allotment A/c  40,000

To Bank 40,000

(Share Application money adjusted)

3. Share Allotment A/c  Dr. 3,00,000

To Share Capital A/c  1,80,000

To Share Premium A/c  1,20,000

(Share allotment money due)

4. Bank A/c  Dr.  2,47,000

To Share Allotment A/c  2,47,000

(Allotment money received except 300 shares)

5. Share First Call A/c  Dr.  1,80,000

To Share Capital A/c  1,80,000

(Share First Call money due)

6. Bank A/c  Dr. 1,57,500

To Share First Call A/c  1,57,500

(Share First Call money received except 750 (300+450 shares)