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Question
'Blur Star Ltd.' was registered with an authorized capital of Rs 2,00,000 divided into 20,000 shares of Rs 10 each. 6,000 of these shares were issued to the vendor for building purchased. 8,000 shares were issued to the public and Rs 5 per share were called up as follows:
On application - Rs 2 per share
On allotment - Rs 1 per share
On the first call - Balance of the called up amount
The amounts received on these shares were as follows:
On 6,000 shares - Full amount called
On 1,250 shares - Rs 3 per share
On 750 shares - Rs 2 per share
The directors forfeited 750 shares on which Rs 2 per share were received.
Pass necessary journal entries for the above transactions in the books of Blue Star Ltd
Solution
| In the Books of Blue Star Ltd Journal |
||||
| Date | Particulars | L.F |
Dr. Rs |
Cr. Rs |
|
Building A/c Dr. To Vendor A/c (Being machinery purchased) |
60,000
|
60,000
|
||
|
Vendor A/c Dr. To Equity Share Capital A/c (Being issued 6,000 shares to the vendor of machinery) |
60,000
|
60,000
|
||
|
Bank A/c Dr. To Equity Share Application A/c (Being application money received on 8,000 shares) |
16,000
|
16,000
|
||
|
Equity Share Application A/c Dr. To Equity Share Capital A/c (Being amount of application transferred to Share Capital) |
16,000
|
16,000
|
||
|
Equity Share Allotment A/c Dr. To Equity Share Capital A/c (Being amount due on share allotment) |
8,000
|
8,000
|
||
|
Bank A/c (8,000 – 750) Dr. To Equity Share Allotment A/c (Being amount received on share allotment) |
7,250
|
7,250
|
||
|
Equity Share First Call A/c Dr. To Equity Share Capital A/c (Being amount due on share first call) |
16,000
|
16,000
|
||
|
Bank A/c (16,000 – 2,500 – 1,500) Dr. To Equity Share First Call A/c (Being amount received on share first call) |
12,000
|
12,000
|
||
|
Equity Share Capital A/c Dr. To Equity Share forfeiture A/c To Equity Share Allotment A/c To Equity Share first, call A/c (Being 750 shares forfeited) |
3,750
|
1,500 750 1,500
|
||
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Based on the below information, you are required to answer the following question:
|
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What amount of share forfeiture would be reflected in the balance sheet?
If 10,000 shares of ₹ 10 each were forfeited for non-payment of final call money of ₹ 3 per share and only 7,000 shares were re-issued @ ₹ 11 per share as fully paid up, then what is the amount of maximum possible discount that company can allow at the time of re-issue of the remaining 3,000 shares?
Pass entries for forfeiture and re-issue in the following case.
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₹ 5 on Application (including premium)
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₹ 4 on First and Final Call.
The subscription was at par and the share money was received in full with the exception of the allotment money on 4,000 shares held by shareholder Ravi and the call money on 6,000 shares (including Ravi's shares).
The above 6,000 shares were forfeited by the company and 5,000 of these (including the shares which had been allotted to Ravi) were reissued at ₹ 8 per share as fully paid-up.
You are required to pass journal entries to record the above transactions in the books of the company.
