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Question
Commence Publications Ltd. issued 50,000 Equity Shares of ₹ 10 each at a premium of 10% payable as under:
| On application | ₹ 2, | On first call | ₹ 2, |
| On allotment | ₹ 5, | On final call | ₹ 2. |
The calls were made by the company and all the money was duly received except the allotment and call money on 500 shares. These shares were, therefore, forfeited and later reissued @ ₹ 9 per share as fully paid-up.
Pass necessary journal entries to record the above transactions.
Solution
Issued and applied 50,000 equity shares at Rs 10 each at a premium Re 1
|
Application |
Rs |
2 |
|
|
Allotment |
Rs |
5 |
(4+1) |
|
First Call |
Rs |
2 |
|
|
Final Call |
Rs |
2 |
|
|
|
Rs |
11 |
(10+1) called-up |
Books of Commerce Publications Ltd.
Journal
|
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
|
Bank A/c |
Dr. |
|
1,00,000 |
|
|
|
To Equity Share Application A/c |
|
|
1,00,000 |
|
|
|
(Share application received for 50,000 shares at Rs 2 each) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share Application A/c |
Dr. |
|
1,00,000 |
|
|
|
To Equity Share capital A/c |
|
|
1,00,000 |
|
|
|
(Share application money transferred to Share Capital) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share Allotment A/c |
Dr. |
|
2,50,000 |
|
|
|
To Equity Share Capital A/c |
|
|
2,00,000 |
|
|
|
To Securities Premium A/c |
|
|
50,000 |
|
|
|
(Share allotment due on 50,000 shares at Rs 5 each including Re1 premium) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
2,47,500 |
|
|
|
Calls-in-Arrears A/c |
Dr. |
|
2,500 |
|
|
|
To Equity Share Allotment |
|
|
2,50,000 |
|
|
|
(Share allotment at Rs 5 each, received on 49,500 shares and holders of 500 shares failed to pay it) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share First Calls A/c |
Dr. |
|
1,00,000 |
|
|
|
To Equity Share capital |
|
|
1,00,000 |
|
|
|
(First call due on 50,000 shares at Rs 2 each) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
99,000 |
|
|
|
Calls-in-Arrears A/c |
Dr. |
|
1,000 |
|
|
|
To Equity Share first call A/c |
|
|
1,00,000 |
|
|
|
(First call received on 49,500 shares and 500 shares failed to pay it) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Shares capital A/c |
Dr. |
|
4,000 |
|
|
|
Securities Premium A/c |
Dr. |
|
500 |
|
|
|
To Share Forfeiture |
|
|
1,000 |
|
|
|
To Calls-in-Arrears A/c |
|
|
3,500 |
|
|
|
(500 shares forfeited for the non-payment of Rs 7 including Re 1 premium) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share Final Call A/c |
Dr. |
|
99,000 |
|
|
|
To Equity Share Capital A/C |
|
|
99,000 |
|
|
|
(Share final call due 49,500 share at Rs 2 each) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
99,000 |
|
|
|
To Equity Share Final Call A/c |
|
|
99,000 |
|
|
|
(Share final call money received) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
4,500 |
|
|
|
Share Forfeiture A/c |
Dr. |
|
500 |
|
|
|
To Equity Share Capital A/c |
|
|
5,000 |
|
|
|
(500 shares of Rs10 each reissued for Rs 9 per share as fully paid-up) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Forfeiture A/c |
Dr. |
|
500 |
|
|
|
To Capital Reserve A/c |
|
|
500 |
|
|
|
(Balance of Share Forfeiture after re-issue transferred to Capital Reserve) |
|
|
|
|
Working Note:
|
Share Forfeiture Credit |
1,000 |
|
Less: Share Forfeiture Debit |
500 |
|
Balance in Share Forfeiture (after re-issue) |
500 |
Capital Reserve = Balance in Share Forfeiture (after re-issue)
= Rs 500
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| To share Forfeited A/c | ₹Y | ||
| To Equity Share Allotment A/c | ₹Z |
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|
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|
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₹ 3 on Allotment
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Roxy Ltd. issued Equity shares of 10 each payable as:
₹ 4 on Application and Allotment; ₹ 2 on First Call; ₹ 4 on Second and Final Call.
Following is an extract of the Journal of Roxy Ltd.
| Journal of Roxy Ltd. (an extract) | ||||
| Date | Particulars | L. F. | Dr. (₹) | Cr. (₹) |
| 1. | Share First Call A/c ...Dr. | 28,000 | ||
| To Share Capital A/c | 28,000 | |||
| (Being first call due on ___??___ shares @ ₹ 2 each) | ||||
| 2. | Bank A/c ...Dr. | ?? | ||
| Calls in arrears A/c ...Dr. | 2,000 | |||
| To Share First Call A/c | 28,000 | |||
| (Being first call received on ___??___ shares) | ||||
| 3. | Share Capital A/c ...Dr. | ?? | ||
| To Shares Forfeited A/c | 4,000 | |||
| To Calls in Arrears A/c | ?? | |||
| (Being ___??___ shares of ₹ 10 each forfeited for non-payment of first call) | ||||
| 4. | Share Second & Final Call A/c ...Dr. | 52,000 | ||
| To Share capital A/c | 52,000 | |||
| (Being second & final call due on ___??___ shares @ ₹ 4 each) | ||||
| 5. | Bank A/c ...Dr. | ?? | ||
| Calls in Arrears A/c ...Dr. | 10,000 | |||
| To Share Second & Final Call A/c | 52,000 | |||
| (Being second call received on ___??___ shares) | ||||
| 6. | Share capital A/c ...Dr. | ?? | ||
| To Shares Forfeited A/c | ?? | |||
| To Calls in Arrears A/c | 10,000 | |||
| (Being ___??___ shares of ₹ 10 each forfeited for non payment of final call) | ||||
| 7. | Bank A/c ...Dr. | ?? | ||
| Share Forfeited A/c ...Dr. | ?? | |||
| To Share Capital A/c | ?? | |||
| (Being 1,500 forfeited shares including those on which the first call was not received reissued @ ₹ 6 per shares fully called) | ||||
| 8. | Share Forfeiture A/c (1,000 × 0) + (500 × 2) ...Dr. | ?? | ||
| To Capital Reserve A/c | ?? | |||
| (Being ___??___) | ||||
You are required to complete the journal entries by filling up the missing information represented by '??', including the number of shares and narration, if any.
