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Question
Kanchana Ltd. issued 50,000 shares ₹ 10 each payable as under?
On application ₹ 1
On allotment ₹ 5
On first call ₹ 2
On final call ₹ 2
Applications were received for 70,000 shares. Applications for 8,000 shares were rejected and allotment was made proportionately towards the remaining applications. The directories made both the calls and all the amounts were received except the final call on 1,500 shares which were subsequently forfeited. Later 1.200 forfeited shares were reissued by receiving ₹ 8 per share. Give journal entries.
Solution
| Rs. | |
| Application money received (70,000 × Rs. 1) | 70,000 |
| Actual amount due (50,000 × Rs. 1) | 50,000 |
| 20,000 | |
| Less: Refund on rejected application (8,000 × Rs. 1) | 8,000 |
| Excess adjusted towards allotment | 12,000 |
| Date | Particulars | L.F. | Debit ₹ | Credit ₹ |
| 1. | Bank A/c Dr. To Share Application A/c (Share Application money received) |
70,000 | 70,000 | |
| 2. | Share Application A/c Dr. To Bank (Excess Share Application money rejected) |
8,000 | 8,000 | |
| 3. | Share Application A/c Dr. To Share Allotment A/c To Share Capital A/c (Share Application money tr to share capital) |
62,000 | 12,000 50,000 |
|
| 4. | Share Allotment A/c Dr. To Share Capital A/c (Share Allotment transfer to Share Capital) |
2,50,000 | 2,50,000 | |
| 5. | Bank A/c Dr. To Share Allotment A/c (Share Allotment money received) |
2,38,000 | 2,38,000 | |
| 6. | Share Ist Call A/c Dr. To Share Capital A/c (Share Ist Call Due) |
1,00,000 | 1,00,000 | |
| 7. | Bank A/c Dr. To Share Ist Call A/c (Share Ist call money received) |
1,00,000 | 1,00,000 | |
| 8. | Share final call A/c Dr. To Share Capital A/c (Share final call due) |
1,00,000 | 1,00,000 | |
| 9. | Bank A/c Dr. To Share final call A/c (Share final call money received) |
97,000 | 97,000 | |
| 10. | Share Capital A/c Dr. To Share forfeited A/c To Share final call A/c (1,500 shares were forfeited) |
15,000 | 12,000 3,000 |
|
| 11. |
Bank A/c Dr. |
9,600 2,400 |
12,000 | |
| 12. | Share forfeiture A/c Dr. To Capital Reserve A/c (Profit on reissue tr to capital reserve A/c) |
7,200 | 7,200 |
Working note-
Amount received per share - Rs. 8
Amount used on reissue - Rs. 2
Rs. 6
Profit on reissue × No. of. shares reissued = Rs. 6 × 1,200 = Rs. 7,200
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