Shipra limited invited application for 80,000 shares of Rs 10 each payable as follows:
Rs. 2.50 on application (on 1st May, 2019);
Rs. 2.50 on allotment (on 1st June,2019);
Rs. 2 on first call (on 1st Nov,2019); and Rs.3 on Second call (on 1st Feb,2020)
All the shares were applied and allotted. Shankar, holding 600 shares paid the whole of the amount along with allotment.
Pass Journal entries assuming that the books are closed on 31st March every year.
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ACCOUNTANCY
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Asked on December 26, 2019 by
Nirajana Jee
DF Ltd. invited applications for issuing 50,000 shares of Rs. 10 each at a premium of Rs. 2 per share, The amount was payable as follows :
On Application : Rs. 3 per share (including premium Rs. 1)
On Allotment : Rs. 3 per share (including premium Rs. 1)
On First call : Rs. 3 per share
On Second and Final Call : Balance amount
Application for 70,000 shares were received. Allotment was made on the following basis.
Applications for 5,000 shares - Full
Applications for 50,000 shares - 90%
Balance of the applications were rejected. Rs. 1,11,000 were received on account of allotment. The amount of allotment due from the shareholders to whom shares were allotted on prorata basis was fully received. A few shareholders to whom shares were allotted in full, failed to pay the allotment money. Rs. 1,20,000 were received on first call. Directors decided to forfeit those shares on which allotment and call money was due. Half of the forfeited shares were re-issued @ Rs. 8 per share fully paid up. Final call was not made.
Pass the necessary journal entries for the above transactions in the book of DP Ltd.
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ANSWER
Date
Particulars
L.F.
Debit (Rs.)
Credit (Rs.)
Bank A/c Dr.
2,10,000
To Share Application A/c
2,10,000
(Being application money received on 70,000 shares)
Share Application A/c Dr.
2,10,000
To Share Capital A/c
1,00,000
To Securities Premium Reserve A/c
50,000
To Share Allotment A/c
15,000
To Bank A/c
45,000
(Being application money transferred to share capital and adjusted)
Share Allotment A/c Dr.
1,50,000
To Share Capital A/c
1,00,000
To Securities Premium Reserve A/c
50,000
(Being allotment due on 50,000 shares)
Bank A/c Dr.
1,11,000
Calls in Arrears A/c Dr.
24,000
To Share Allotment A/c
1,35,000
(Being allotment money received with the exception of 8,000 shares)
Share First Call A/c Dr.
1,50,000
To Share Capital A/c
1,50,000
(Being first call due on 50,000 shares)
Bank A/c Dr.
1,20,000
Calls in Arrears A/c Dr.
30,000
To Share First Call A/c
1,50,000
(Being allotment money received with the exception of 8,000 shares)
Share Capital A/c Dr.
56,000
Securities Premium Reserve A/c
8,000
To Forfeited Shares A/c
16,000
To Calls in Arrears A/c
48,000
(Being 8,000 shares for non-payment of allotment and first call and 2,000 shares for non-payment of first call forfeited)
Bank A/c Dr.
32,000
Forfeited Shares A/c Dr.
8,000
To Share Capital A/c
40,000
(Being 50% of forfeited shares reissued as fully paid-up)
Pro-Rata Computation table
Categories
Shares Applied
Shares Allotted
Application Money received @ Rs. 3
Application Money transferred to share capital & SPR @ Rs. 3
Excess on application (Rs.)
Allotment @ Rs. 3 against
First call @ Rs. 3
Refund Rs.
Face value @ Rs. 2
SPR @ Rs. 1
A
5,000
5,000
15,000
15,000
B
50,000
45,000
1,50,000
1,35,000
15,000
15,000
C
15,000
45,000
45,000
70,000
50,000
2,10,000
1,50,000