The issued share capital of Alfa Limited consists of 1,00,000 equity shares of * 10 each fully paid up.
The company offers to its shareholders shares on rights basis in the ratio of 1:1; the shares of 10
each being offered at a premium of 10 per share. Half of the price was payable with the application
and the balance was payable on allotment, distribution being as follow:
With application
On allotment
Share capital
Share Premium
5
5
5
10
10
Answers
Answer:
Bank A/c
Dr.
4,00,000
To Equity Share Application and Allotment A/c
4,00,000
(Application money received on 1,00,000 shares)
Equity Share Application and Allotment A/c
Dr.
4,00,000
To Equity Share Capital A/c
3,00,000
To Equity Share First Call A/c
1,00,000
(Application money transferred to share capital account and excess money is adjusted in first call account)
Equity Share First Call A/c
Dr.
2,25,000
To Equity Share Capital A/c
2,25,000
(Amount due on first call)
Bank A/c (2,25,000 – 1,00,000 – 1,250)
Dr.
1,23,750
To Equity Share First Call A/c
1,23,750
(Amount received on first call)
Equity Share Capital A/c
Dr.
5,250
To Equity Share Forfeiture A/c
4,000
To Equity Share First Call A/c
1,250
(Vibha’s shares were forfeited)
Equity Share Second and Final Call A/c
Dr.
2,22,750
To Equity Share Capital A/c
2,22,750
(Amount due on second and final call after forfeiting Vibha’s shares)
Bank A/c (2,22,750 – 2,250)
Dr.
2,20,500
To Equity Share Second and Final Call A/c
2,20,500
(Amount received on second and final call)
Equity Share Capital A/c
Dr.
7,500
To Equity Share Forfeiture A/c
5,250
To Equity Share Second and Final Call A/c
2,250
(Monika’s shares were forfeited)
Bank A/c
Dr.
9,000
Equity Share Forfeiture A/c
Dr.
6,000
To Equity Share Capital A/c
15,000
(Forfeited shares were reissued for Rs 9,000 as fully paid-up)
Equity Share Forfeiture A/c
Dr.
3,250
To Capital Reserve A/c
3,250
(Excess amount on forfeiture is transferred to capital reserve)
Working Notes:
WN1: Calculation of Amount not received on First Call
WN2: Calculation of Amount not received on Second Call