Venus Ltd. with a Registered capital of 5,00,000 equity shares of * 100 each, issued
1,00,000 equity shares for subscription payable * 30 on application, 20 on allotment,
30 on first call and 20 on second and final call. The amount due on allotment was duly
received except from Mr. X holding 6,000 shares. His shares were immediately forfeited.
On the first call being made, Mr. Y holding 5,000 equity shares paid the total amount
due on his holding. Second and final call was not made. Out of the forfeited shares,
5,000 shares were reissued as fully paid-up @ * 80 per share.
You are required to:
(1) Pass Journal entries in the books of the Company.
-(1) Prepare Calls-in-Arrears Account
(ii) prepare forfeited Shares Account
Answers
Answer:
Option B is correct answer
Explanation:
4. (i) JOURNAL OF VENUS LTD.
Date Particulars L.F. Dr. (`) Cr. (`)
Bank A/c ...Dr. 30,00,000
To Equity Shares Application A/c 30,00,000
(Being application money received on 1,00,000
shares @ ` 30 per share)
Equity Shares Application A/c ...Dr. 30,00,000
To Equity Share Capital A/c 30,00,000
(Being application money transferred to Equity Share Capital A/c)
Equity Shares Allotment A/c ...Dr. 20,00,000
To Equity Share Capital A/c 20,00,000
(Being allotment made due on 1,00,000 equity
shares @ ` 20 per share)
Bank A/c ...Dr. 18,80,000
Calls-in-Arrears A/c (6,000 × ` 20) ...Dr. 1,20,000
To Equity Shares Allotment A/c 20,00,000
(Being allotment money received except on 6,000 shares)
Equity Share Capital A/c ...Dr. 3,00,000
To Forfeited Shares A/c 1,80,000
To Calls-in-Arrears A/c 1,20,000
(Being 6,000 shares forfeited for non-payment of allotment money)
Equity Shares First Call A/c ...Dr. 28,20,000
To Equity Share Capital A/c 28,20,000
(Being first call made due on 94,000 equity shares @ ` 30 per share)
Bank A/c ...Dr. 29,20,000
To Equity Shares First Call A/c 28,20,000
To Calls-in-Advance A/c 1,00,000
(Being first call money received on 94,000 equity shares @ ` 30 per
share and ` 20 per share on 5,000 shares received in advance)
Bank A/c (5,000 × ` 80) ...Dr. 4,00,000
Forfeited Shares A/c (5,000 × ` 20) ...Dr. 1,00,000
To Equity Share Capital A/c 5,00,000
(Being 5,000 shares reissued at ` 80 per share as fully paid-up)
Forfeited Shares A/c ...Dr. 50,000
To Capital Reserve A/c 50,000
(Being gain on reissue transferred to Capital Reserve Account) (WN 1)
(ii) Dr. CALLS-IN-ARREARS ACCOUNT Cr.
Particulars ` Particulars `
To Equity Shares Allotment A/c 1,20,000 By Equity Share Capital A/c 1,20,000
1,20,000 1,20,000
(iii) Dr. FORFEITED SHARES ACCOUNT Cr.
Particulars ` Particulars `
To Equity Share Capital A/c 1,00,000 By Equity Share Capital A/c 1,80,000
To Capital Reserve A/c 50,000
To Balance c/d 30,000
1,80,000 1,80,000
Working Note:
Calculation of Gain on Reissue of forfeited shares:
Amount forfeited on 5,000 shares
1,80,000 5,000 6,000
` ` 1,50,000
Less: Discount on reissue ` 1,00,000
Gain on reissue transferred to Capital Reserve ` 50,000