Question

JJK Ltd invited application or issuing 50,000 equity shares of 10 each at par. The amount was payable as follows:

On Application: Rs 2 per share
On Allotment: Rs 4 per share
On first and Final Call: Balance Amount

The issue was oversubscribed three times. Applications for 30% shares were rejected and money refunded. 

The allotment was made to the remaining applicants as follows:

Category	No. of Shares Applied	No. of shares Allotted
I	80,000	40,000
II	25,000	10,000

Excess money paid by the applicants who were allotted shares was adjusted towards the sums due on allotment.

Deepak, a shareholder belonging the Category I, who had applied for 1,000 shares, failed to pay the
allotment money. Raju, a shareholder holding 100 shares, also failed to pay the allotment money. Raju belonged to category II. Shares of both Deepak and Raju were forfeited immediately after allotment. Afterwards, first and final call was made and was duly received. The forfeited shares of Deepak and Raju were reissued at 11 per share fully paid up
Pass necessary journal entries for the above transactions in the books of the company

Answer 1

Journal
Date	Particulars	L.F.	Debit Rs	Credit Rs
	Bank A/c (1,50,000 x 2)   Dr     To Share Application A/c (Received application money on 1,50,000 shares) Share Application A/c   Dr    To Share Capital A/c    To Share Allotment A/c (80,000 + 30,000)    To Bank A/c (60,000 x 3) + 40,000) (Transfer of application money to Share Capital) Share Allotment A/c (50,000 x 4)   To Share Capital A/c (Allotment due on 50,000 shares ) Bank A/c    Dr Calls-in Arrears    To Share Allotment A/c (2,00,000 − 1,10,000) (Allotment money received) Share Capital A/c (600 x 6)    Dr    To Share Allotment A/c    To Share Forfeiture A/c (Forfeiture of 600 shares for non-payment of allotment money) Share First and Final Call A/c ( 49,400 x 4)   Dr    To Share Capital A/c (Call money due on 1,00,000 shares) Bank A/c  Dr    To Share First and Final Call A/c (Received call money) Bank A/c (600 x 11)  Dr    To Share Capital A/c    To Security Premium Reserve A/c (Reissue of 600 shares at Rs 11 per share) Share Forfeiture A/c   Dr    To Capital Reserve A/c (Profit on re-issue transferred to Capital Reserve Account)		3,00,000     3,00,000         2,00,000     88,900 1,100     3,600       1,97,600     1,97,600     6,600       2,500	3,00,000     1,00,000 1,10,000 90,000     2,00,000       90,000     1,100 2,500     1,97,600     1,97,600     6,000 600     2,500

Working Notes:

Category	Share Applied	Share Allotted	Application Money Received @ Rs 2	T/f to Share Capital	Excess Money	Adjusted to Allotment	Adjusted to Call	Refund
I	80,000	40,000	1,60,000	80,000	80,000	80,000	-	-
II	25,000	10,000	50,000	20,000	30,000	30,000	-	-
III	45,000	-	90,000	-	-	-		90,000
	1,50,000	50,000	3,00,000	1,00,000	1,10,000	1,10,000		90,000

Deepak

Applied 1,000

Alloted  `1000 xx 40000/80000 = 500`

Amount paid at time of application= 1,000 100 = 2,000

Less: Adjusted towards application= 5,00 x 2   = (1000)

                                                        Excess        1,000

Amount due on Allotment 500 x 4 = 2,000

Less: Excess Adjusted                  =(1000)

Calls in Arrears                                10000

Raju

Alloted 100 Shares

Applied= `25000/10000 xx 100 = 250`

Amount paid at application = 250 x 2 = 500

Less : Adjusted with Application = 100 x 2 = 200

Excess  300

Amount due on Allotment 100 x 4  = 400

Less : Excess Adjusted   = (300)

Calls in Arrears  100