Suzuki Limited issued a prospectus inviting applications for 60,000 shares of Rs. 10 each at a premium of 30% payable as follows : On Applications Rs. 3.50, On Allotment Rs. 5.50 (including premium) : On First Call Rs. 2 and on Second Call Rs. 2. Applications were received for 95,000 shares and allotment was made pro-rata to applicants of 80,000 shares. Money over-paid on applications were employed on account of sums due on allotment. X, to whom 1,500 shares were allotted failed to pay the allotment money and on his subsequent failure to pay the First Call his shares were forfeited. Y, the holder of 2,400 shares failed to pay the two calls and his shares were forfeited after the second Call. Of the shares forfeited, 3,000 shares were sold to Z as fully paid, Z paying Rs. 8.50 per share, the whole of Y' s share being included. Give journal entries and prepare Bank ASccount.
Answers
Answer:
Suzuki Limited issued a prospectus inviting applications for 60,000 shares of Rs. 10 each at a premium of 30%
Explanation:
Bank A/c (30,000×2) Dr. 60,000
To Share Application A/c 60,000
(Application money received)
Share Application A/c Dr. 60,000
To Share Capital A/c (20,000×2) 40,000
To Share Allotment A/c (4,000×2) 8,000
To Bank A/c (6,000×2) 12,000
(Application money adjusted to share capital carried to allotment and also refunded)
Share Allotment A/c (20,000×5) Dr. 1,00,000
To Share Capital A/c (20,000×3) 60,000
To Securities Premium Reserve A/c (20,000×2) 40,000
(Allotment money due along with premium)
Bank A/c Dr. 90,160
To Share Allotment A/c (1,00,000–8,000–1,840) 90,160
(Allotment money received)
Share First Call A/c (20,000×3) Dr. 60,000
To Share Capital A/c 60,000
(First call money due)
Bank A/c (19,000×3) Dr. 57,000
To Share First Call A/c 57,000
(Call money received)
Share Capital A/c (400×8) Dr. 3,200
Securities Premium Reserve A/c (400×2) Dr. 800
To Share Allotment A/c 1,840
To Share First Call A/c (400×3) 1,200
To Share Forfeiture A/c (480×2) 960
(400 share forfeited for non-payment of allotment and first call money)
Share Second & Final Call A/c (19,600×2) Dr. 39,200
To Share Capital A/c 39,200
(Second call money due)
Bank A/c Dr. 38,000
To Share Second & Final Call A/c (19,000 ×2) 38,000
(Second call money received)
Share Capital A/c (600×10) Dr. 6,000
To Share First Call A/c (600×3) 1,800
To Share Second & Final Call A/c (600×2) 1,200
To Share Forfeiture A/c (600×5) 3,000
(600 shares forfeited for non-payment of first call and second call)
Bank A/c (800×9) Dr. 7,200
Share Forfeiture A/c (800×1) Dr. 800
To Share Capital A/c (800×10) 8,000
(800 shares reissued @ Rs 9 per share)
Share Forfeiture A/c Dr. 2,160
To Capital Reserve A/c 2,160
( Profit on reissue transferred to Capital Reserve)
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