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Question
Janta Ltd., invited application for issuing 2,00,000 equity share of Rs 10 each at a discount of 10%. The amount was payable as follows:
On Application Rs 2 per share
On Allotment Rs 3 per share
On First and final call-balance amount
The issue was undersubscribed to the extent of 20,000 shares. Shares were allotted to all the application. All calls were made and were dully received. ‘A’ to whom 1,500 shares were allotted failed to pay allotment and call money and ‘B’ to whom 1,200 share were allotted paid the full amount due at the time of allotment. The share on which allotment and call money was not received were forfeited. The forfeited shares were re-issued at Rs 8 per share fully paid up.
Pass necessary journal entries in the books of Janta Ltd., for the above transaction.
Solution
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Journal |
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Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
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Bank A/c (1,80,000 shares × Rs 2) |
Dr. |
|
3,60,000 |
|
|
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To Share Application A/c |
|
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3,60,000 |
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(Application money received on 1,80,000 shares) |
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Share Application A/c |
Dr. |
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3,60,000 |
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|
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To Share Capital A/c |
|
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3,60,000 |
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(Application money transferred to Share Capital Account) |
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Share Allotment A/c (1,80,000 shares × Rs 3) |
Dr. |
|
5,40,000 |
|
|
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Discount on Issue of Shares A/c (1,80,000 shares × Rs 3) |
Dr. |
|
1,80,000 |
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To Share Capital A/c (1,80,000 shares × Rs 4) |
|
|
7,20,000 |
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(Allotment money due) |
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Bank A/c |
Dr. |
|
5,40,000 |
|
|
|
Calls-in-Arrears A/c (1,500 shares × Rs 3) |
Dr. |
|
4,500 |
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To Share Allotment A/c |
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5,40,000 |
|
|
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To Calls-in-Advance A/c (1,200 shares × Rs 4) |
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4,800 |
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(Allotment money received except on 1,500 shares and excess on 1,500 shares with calls in advance) |
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Share First and Final Call A/c (1,80,000 shares × Rs 4) |
Dr. |
|
|
7,20,000 |
|
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To Share Capital A/c |
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(First and final call money due at Rs 4 per share) |
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Bank A/c |
Dr. |
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7,09,200 |
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Calls-in-Advance A/c (1,200 shares × Rs 4) |
Dr. |
|
4,800 |
|
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Calls-in-Arrears A/c (1,500 shares × Rs 4) |
Dr. |
|
6,000 |
|
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To Share First and Final Call A/c |
|
|
7,20,000 |
|
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(First and final call money received) |
|
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|
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Share Capital A/c (1,500 shares × Rs 10) |
Dr. |
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15,000 |
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To Share Forfeiture A/c (1,500 shares × Rs 2) |
|
|
3,000 |
|
|
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To Share Allotment A/c (1,500 shares × Rs 3) |
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4,500 |
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To Share First and Final Call A/c (1,500 shares × Rs 4) |
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6,000 |
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To Discount on Issue of Shares A/c (1,500 shares × Re 1) |
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1,500 |
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(1,500 shares forfeited for non-payment of allotment and call money) |
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Bank A/c (1,500 shares × Rs 8) |
Dr. |
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12,000 |
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Discount on Issue of Shares A/c (1,500 shares × Re 1) |
Dr. |
|
1,500 |
|
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Share Forfeiture A/c (1,500 shares × Re 1) |
Dr. |
|
1,500 |
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To Share Capital A/c |
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15,000 |
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(1,500 shares re-issued for Rs 8 per shares) |
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Share Forfeiture A/c |
Dr. |
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1,500 |
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To Capital Reserve A/c |
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1,500 |
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(Profit on re-issue of shares transferred to Capital Reserve) |
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