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Question
Ratan Limited invited applications for issuing 12,000 equity shares of Rs 100 each at a premium of Rs 75 per share. The amount was payable as follows :
On application and allotment — Rs 100 per share (including Rs 50 premium)
On first and final call — The balance
Applications for 15,000 shares were received. Shares were allotted on pro-rata basis to all applicants. Excess money received with applications was adjusted towards sums due on first and final call. Govind who had applied for 300 shares paid the full share money at the time of applying for shares. Girdhar, who had applied for 600 shares, failed to pay the first and final call money. His shares were forfeited. Out of the forfeited shares, 300 shares were re-issued at Rs 90 per share as fully paid-up.
Pass necessary journal entries for the above transactions in the books of 'Ratan Limited'.
Solution
| In the books of Ratan Ltd Journal Entry |
||||
| Date | Particulars | L.F |
Dr. Rs |
Cr. Rs |
|
Bank A/c (15,00,000 + 22,500) Dr. To Equity Share Application and Allotment A/c (Being amount received on application 15,000 shares, along with calls – in - advance) |
15,22,500
|
15,22,500 | ||
|
Equity Share Application and Allotment A/c Dr. To Equity Share Capital A/c To Securities Premium A/c To Equity Share First and Final Call A/c To Bank A/c (Being amount of application transferred to Share Capital and excess money is adjusted in first and final call account) |
15,22,500
|
6,00,000 6,00,000 3,12,000 10,500
|
||
|
Equity Share First and Final Call A/c Dr. To Equity Share Capital A/c To Securities Premium A/c (Being amount due on first and final call) |
9,00,000
|
6,00,000 3,00,000
|
||
|
Bank A/c (9,00,000 – 3,12,000 – 24,000) Dr. To Equity Share First and Final Call A/c (Being amount received on first and final call) |
5,64,000
|
5,64,000
|
||
|
Equity Share Capital A/c Dr. Securities Premium A/c To Equity Share Forfeiture A/c To Equity Share First and Final Call A/c (Being Giridhar’s shares were forfeited) |
48,000 12,000
|
36,000 24,000
|
||
|
Bank A/c Dr. Equity Share Forfeiture A/c Dr. To Equity Share Capital A/c (Being Forfeited shares were reissued for 90 as fully paid -up) |
27,000 3,000
|
30,000 | ||
|
Equity Share Forfeiture A/c Dr. To Capital Reserve A/c (Being excess amount on forfeiture is transferred to capital reserve) |
19,500
|
19,500
|
||
Working Notes:
WN 1:
Calculation of amount refunded to Govind
Shares allotted to Govind = `12000/15000 xx 300 = 240 " shares"`
Amount received on 300 shares of 100 each = 30,000
Amount transferred to Share Capital A/c (240 x 50) =12,000
Amount transferred to Securities Premium A/c (240 x 50) = 12,000
Excess money received on application and Allotment = 6,000
Amount due on First call @ 75 each = 18,000
Amount adjusted on First Call = 12,000 (18,000 – 6,000)
Actual amount received from Govind on 300 shares @ 175 = 52,500
Amount to be adjusted on 240 shares @ 175 = 42,000
Therefore, Amount refunded = 10,500 (52,500 – 42,000)
WN2:
Calculation of amount not received from Girdhar
Shares allotted to Giridhar = `12,000/15000 xx 600 = 480` shares
Amount received on 600 shares of 100 each = 60,000
Amount transferred to Share Capital A/c (480 x 50) = 24,000
Amount transferred to Securities Premium A/c (480 x 50) = 24,000
Excess money received on Application and Allotment = 12,000
Amount due on First Call @ 75 each = 36,000
Amount not received on First Call = 24,000 (36,000 – 12,000)
WN 3:
Calculation of amount transferred to Capital Reserve
Share Forfeiture of 480 shares = 36000
Share Forfeiture of 300 shares =`36000/480 xx 300= 22500`
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Answer in one Sentence only :
Give the full form of SEBI.
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| To share Forfeited A/c | ₹Y | ||
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