Question

Amisha Ltd inviting application for 40,000 shares of Rs 100 each at a premium of Rs 20 per share payable; on application Rs 40 ; on allotment Rs 40 (Including premium): on first call Rs 25 and Second and final call Rs 15. Application were received for 50,000 shares and allotment was made on pro-rata basis. Excess money on application was adjusted on sums due on allotment. Rohit to whom 600 shares were allotted failed to pay the allotment money and his shares were forfeited after allotment. Ashmita, who applied for 1,000 shares failed to pay the Two calls and his shares were forfeited after the second call. Of the shares forfeited, 1,200 shares were sold to Kapil for Rs 85 per share as fully paid, the whole of Rohit’s shares being included. Record necessary journal entries.

Answer 1

Books of Amisha Ltd.

Date	Particulars						L.F.	Debit Amount Rs	Credit Amount Rs
	Bank A/c					Dr.		20,00,000
		To Share Application A/c							20,00,000
	(Share Application money received on 50,000 shares @ 40 per share)
	Share Application A/c					Dr.		20,00,000
		To Share Capital A/c							16,00,000
		To Share Allotment A/c							4,00,000
	(Share Application money adjusted)
	Share Allotment A/c					Dr.		16,00,000
		To Share Capital A/c							8,00,000
		To Share Premium A/c							8,00,000
	(Share Allotment money due including premium)
	Bank A/c					Dr.		11,82,000
		To Share Allotment A/c							11,82,000
	(Share Allotment money received except 600 shares)
	Share Capital A/c				Dr.			36,000
	Share premium A/c				Dr.			12,000
				To Share Allotment A/c					18,000
				To Share Forfeiture A/c					30,000
	(600 shares forfeited after allotment)
	Share First Call A/c				Dr.			9,85,000
				To Share Capital					9,85,000
	(First Call money in due on 39,400 shares)
	Bank A/c				Dr.			9,65,000
				To Share First Call A/c					9,65,000
	(First Call money received except 800 shares)
	Share Second and Final Call A/c				Dr.			5,91,000
				To Share Capital A/c					5,91,000
	(Second and Final Call money due on 39,400 shares)
	Bank A/c				Dr.			5,79,000
				To Share Second and Final Call A/c					5,79,000
	(Second and Final Call money received except 800 shares)
	Share Capital A/c				Dr.			80,000
				To Share First Call A/c					20,000
				To Share Second & Final Call A/c					12,000
				To Share Forfeiture A/c					48,000
	(800 share forfeited)
	Bank A/c				Dr.			1,02,000
	Share Forfeiture A/c				Dr.			18,000
				To Share Capital A/c					1,20,000
	(Forfeited shares reissued 1,200 @ 85 per share)
	Share Forfeiture A/c				Dr.			48,000
			To Capital Reserve A/c						48,000
	(Profit on 1,200 reissued shares are transfer to capital reserve account)

Cash Book (Bank Column)

Dr.							Cr.
Date	Particulars	J.F.	Amount Rs	Date	Particulars	J.F.	Amount Rs
	Share Application		20,00,000		Balance c/d		48,28,000
	Share Allotment		11,82,000
	Share First Call		9,65,000
	Share Final Call		5,79,000
	Share Capital		1,02,000
			48,28,000				48,28,000

Working note:

1. Number of shares applied by rohit

=`"Total number of apllied shares"/"Total number of alloted shares"xx" No. of shares alloted"`

`(50,000)/(40,000) xx 600= 750" shares"`

2. Call in arrears by Rohit on allotment

Money received on Application	(750×40)	30,000
Less: Amount adjusted on Application	(600×40)	24,000
Amount adjusted on Allotment		6,000

3.

Money due on Allotment	(600×40)	24,000
Money adjusted		6,000
Balance due on Allotment		18,000

4. Number of shares alloted to ashmita 

`"Total number of apllied shares"/"Total number of alloted shares"xx" No. of shares alloted"`

`(40,000)/(50,000)xx1000=800" shares"`

5. Profit on the forfeiture of 600 share of Rohit = Rs 30,000

Profit on the forfeiture of 600 share of Ashmita = Rs 36,000 `(48,000xx(600)/800=36,000)`

Profit on forfeiture of 1200 shares (30,000 + 36,000)		=	66,000
Less: Loss on reissue of shares		=	18,000
Transfer to Capital Reserve		=	48,000

6. Balance in Share Forfeiture Account (48,000 – 36,000) = Rs 12,000