Question

sudershan Limited invited application for 100000 equity shares of rupees 10 each the shares were issued at a premium of 5% the amount was payable as follows on application and allotment it Persia including 3 premium balance on first and final call​. the allotment was made to the applicants on the following basis: applicants for 80000 shares were allotted 60000 shares applicants for 60000 shares were allotted 40000 shares applicants for 10000 shares were allotted Nil. X who belong to the first category and was allotted 300 shares fail to pay the first and final call money why who belong to the second category and was allotted 200 shares also failed to pay the first call money. there shares are forfeited the forfeited shares vary issued @ 12% fully paid up pass the necessary journal entries and cash book in the books of company

Answer 1

Answer: yes

Explanation:

Look I’ll give you the format. I think you have to calculate the over subscription and allotment on pro Rata basis. I.e 80000:60000, 60000:40000 etc. but since X failed in 300 shares and Y failed in 200 shares, I don’t think no need to calculate the share issue at pro rate and the journals will be as follows:

Share capital xxx

Securities premium xxx

To forfeited shares (includes application and allotment money) xxx

To first and final call (money due) xxx