RISING STARS LTD invited applications for 21,000 shares of Rs 10 each at a premium of
Rs 2 per share payable as Rs 5 on application (including premium Rs2), Rs 4 on allotment and
balance on call .The public applied for 20,000 shares and 100% shares were allotted to all the
applicants. All the amt. was duly received except on 500 shares on allotment and call. These
shares were FORFEITED in due course . 40% of forfeited shares were reissued at 10%
premium as fully paid up. Give journal entries in the books of Rising stars Ltd.
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Answer:
A Ltd. invited applications for issuing 1,00,000 shares of Rs.10 each at a premium of Rs. 1 per share. The amount was payable as follows:
On Application : Rs.3 per share
On Allotment : Rs.3 per share (including premium)
On First Call : Rs.3 per share
On Second and Final call : Balance amount
Applications for 1,60,000 shares were received. Allotment was made on the following basis:
(i) To applicants for 90,000 shares :40,000 shares
(ii) To applicants for 50,000 shares : 40,000 shares
(iii) To applicants for 20,000 shares : full shares
Excess money paid on application is to be adjusted against the amount due to allotment and calls.
Rishab, a shareholder, who applied for 1,500 shares and belonged to category (ii), did not pay allotment, first and second and final call money.
Another shareholder, Sudha, who applied for 1,800 shares and belonged to category (i), did not pay the first and second and final call money.
All the shares of Rishab and Sudha were forfeited and were subsequently re-issued at Rs.7 per share fully paid.
Pass the necessary journal entries in the books of A Ltd. Open Calls-in-Arrers Account and Calls-in-Advance Account wherever required.
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ANSWER
In the books of A Ltd.
Journal
Particulars
Dr.
Cr.
Bank A/c Dr.
4,80,000
To Share application A/c
4,80,000
(Being money received)
Share application A/c Dr.
4,80,000
To Share capital A/c
3,00,000
To Share allotment A/c
1,50,000
To Share Ist call A/c
30,000
(Being money transferred)
Share allotment A/c Dr.
3,00,000
To Share capital A/c
2,00,000
To SPR A/c
1,00,000
(Being money due)
Bank A/c Dr.
1,47,300
Calls in arrears A/c Dr.
2,700
To Share allotment A/c
1,50,000
(Being money received)
Share Ist call A/c Dr.
3,00,000
To Share capital A/c
3,00,000
(Being money due)
Bank A/c Dr.
2,64,400
Calls in arrears A/c Dr.
5,400
To Share Ist call A/c
2,70,000
(Being first call received)
Share final call A/c Dr.
2,00,000
To Share Capital A/c
2,00,000
(Being first call due)
Bank A/c Dr.
1,96,000
Calls in Arrears A/c Dr.
4,000
To Share final call A/c
2,00,000
(Being final call received)
Share capital A/c Dr.
12,000
SPR A/c Dr.
1,200
To Share forfeited A/c
4,500
To calls in Arrears A/c
8,700
(Being share forfeited)
Share capital A/c Dr.
8,000
To Share forfeited A/c
4,600
To Calls in arrears A/c
3,400
(Being share forfeited)
Bank A/c Dr.
14,000
Share forfeited A/c Dr.
6,000
To Share Capital A/c
20,000
(Being share reissue)
Share forfeited A/c Dr.
3,100
To Capital reserve A/c
3,100
(Being amount transferred capital reserve)
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