Question

X limited issued 100000 equity shares of 10 each.Application money-2 allotment money-4 first call money-4.The company recieved 150000 shares.Pro-rata was made for 120000 shares.Amith who was alloted 1000 shares failed to pay the allotment and first call money and sumit who was alloted 500 shares failed to pay the first call money.All the shares were forfeited.Sumit's 500 shares and Amith's 600 shares were re-issued at 8 per share.Pass Journal entries​

Answer 1

Money received in Share application account - 4,50,000 (1,50,000 X 3)

Less: Money for share allotment - 3,00,000 (100000 X 3)

Less: money for shares rejected - 60,000 (20000 X 3)

__________

Excess money available 90,000

The amount of excess application money available for adjustment against allotment is Rs.90,000.

Answer 2

Answer:

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Explanation:

Oversubscription is the case when a company receives application more than the issued shares.

These extra 5000 shares can be treated in the following ways:

1. The company may refund the amount received on these 5000 excess shares.

2. Prorata allotment can be made in which the shares can be re-adjusted as per the conditions.

3. The company can resolve the problem be rejecting some of the shares, full allotment to some shares and making pro-rata allotment to the rest of the shares.

4. Reject some of the shares and make pro-rata allotment to rest of the shares.

5. The company can even make pro-rata allotment to all shares and the excess money can be used in fulfilling the calls money.