Question

X Ltd. invited applications for 10,000 Equity Shares of ₹ 10 each for public subscription. The amount of these shares was payable as:
On application ₹ 1 per share, on allotment ₹ 2 per share, on first call ₹ 3 per share and on second and final call ₹ 4 per share.
All sums payable on application, allotment and calls were duly received with the following exceptions:
(i) A, who held 200 shares, failed to pay the money on allotments and calls.
(ii) B to whom 150 shares were allotted, failed to pay the money on first call and final call.
(iii) C, who held 50 shares did not pay the amount of second and final call.
The shares of A, B and C were forfeited and were subsequently reissued for cash as fully paid-up at a discount of 5%.
Pass necessary journal entries to record these transactions in the books of X Ltd.

Answer 1

Bank A/c Dr.

1,44,800

To Share application A/c

1,44,800

(Being Application money received)

Share application A/c Dr.

1,44,800

To Share capital A/c

1,00,000

To Share allotment A/c

20,800

To Bank A/c

21,000

To Calls in advance A/c

3,000

(Being application money transferred)

OR

Share application A/c Dr.

1,44,800

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Answer 2

Answer:

Explanation:

Working notes

Total shares issued  and applied 10000

Amount received on application 1*10000=10000

Amount received on allotment

⇒ total amount on allotment - Amount not paid on allotment by A

⇒  10000 * 2 = 20000

⇒  20000- ( 200 *2)

⇒ 20000 - ( 400)

⇒ 19600

Amount received on first call

⇒ total amount on first call - ( amount not received on calls not paid by A and B)

⇒ 10000 * 3 = 30000

⇒ 30000 - ( 200 *3 ) - ( 150 * 3 )

⇒ 30000 - (600) - (450)

⇒ 30000 - 1050

⇒ 28950

Amount received on second and final call

total amount on second and final call - amount not paid on call by  A, B, C

⇒ 10000 * 4 = 40000

⇒ 40000- ( 200 * 4)- ( 150 * 4)- (50 * 4)

⇒ 40000- 800-600-200

⇒ 40000 -1600

⇒ 38400

⇒ 40000 - (200)

⇒ 39800

Total amount forfeited

Shares forfeiture of A

100 * 2 = 200

shares forfeiture of B

150 * 3 = 450

share forfeiture of C

50 * 6 = 300

total amount forfeited 200+450+300= 950

Capital reserve

Total amount forfeited - discount on reissue

discount on reissue is 5%of 4000

⇒ 200

⇒950 - 200 = 750