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Question
R.K. Ltd. invited applications for issuing 70,000 Equity Shares of Rs 10 each at a premium of Rs 35 per share. The amount was payable as follows:
On Application Rs 15 per share (including Rs 12 Premium)
On Allotment Rs 10 per share (including Rs 8 Premium)
On First and Final Call − Balance
Applications for 65,000 shares were received and allotment was made to all the application. A shareholder, Ram who was allotted 2,000 shares were failed to pay the allotment money. His shares were forfeited immediately after allotment. Afterwards the first and final call was made. Sohan, who had 3000 shares failed to pay the first and final call. His shares were also forfeited. Out of the forfeited shares 4,000 shares were re-issued at Rs 50 per share fully paid up. The re-issued shares included all the shares of Ram.
Pass necessary Journal Entries for the above transactions in the books of R.K. Ltd.
Solution
|
Book of Shaym Ltd. |
|||||
|
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
|
Bank A/c To Share Application (Share Application received for 65,000 shares)
Share Application A/c To Equity Share Capital A/c To Securities Premium A/c (Share Application of 65,000 shares transferred to equity share capital and securities premium)
Share Allotment A/c To Equity Share Capital A/c To Securities Premium A/c (Share Allotment due)
Bank A/c Calls-in-Arrears A/c To Share Allotment A/c (Share allotment received on all shares except 2,000 shares)
Equity Share Capital A/c Securities Premium A/c To Share Forfeiture A/c To Calls-in-Arrears A/c (2,000 shares forfeited for the non-payment of allotment)
Share First and Final Call A/c To Equity Share Capital A/c To Securities Premium A/c (Share first and final call due on 3,000 shares)
Bank A/c Calls in Arrears A/c To Share First and Final Call A/c (Share First and Final Call received on all shares except 3000 shares)
Equity Share Capital A/c Securities Premium A/c To Share Forfeiture A/c To Calls in Arrears A/c (3000 Shares forfeited for the no non-payment of First and Final Call)
Bank A/c To Share Capital A/c To Securities Premium A/c (4,000 shares forfeited share were-issued)
Share Forfeiture A/c To Capital Reserve A/c (Balance of 4000 reissued transferred to Capital Reserve) |
Dr.
Dr.
Dr.
Dr. Dr.
Dr. Dr.
Dr.
Dr. Dr.
Dr. Dr.
Dr.
Dr. |
|
9,75,000
9,75,000
6,50,000
6,30,000 20,000
10,000 16,000
12,60,000
12,00,000 60,000
45,000
|
9,75,000
1,95,000 7,80,000
1,30,000 5,20,000
6,50,000
6,000 20,000
3,15,000 9,45,000
12,60,000
60,000
1,60,000
16,000 |
Ram
Share forfeiture credit 3 per share
Share forfeiture debit NIL per share
Share forfeiture credit after time 3 per share
Capital Reserve on reissue of Ram share = Share forfeiture credit after re-issue × No. of shares
re-issued
= 3 × 2,000
= Rs 6,000
Sohan
Share forfeiture credit 5 per share
Share forfeiture Debit NIL per share
Share forfeiture credit after 5 per share re-issue
Capital Reserve on re-issue of Sohan’s 1,000 shares = Share forfeiture after issue × No. of shares
re-issued
= 5 × 2,000
= Rs 10,000
Total capital Reserve = 6,000 + 10,000
= Rs 16,000
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Information
|
Particulars |
Amount Rs |
|
Net Sales |
60,00,000 |
|
Cost of goods sold |
45,00,000 |
|
Other current assets |
11,00,000 |
|
Current liabilities |
4,00,000 |
|
Paid up share capital |
6,00,000 |
|
6% Debentures |
3,00,000 |
|
9% Loan |
1,00,000 |
|
Debentures Redemption Reserve |
2,00,000 |
|
Closing Stock |
1,00,000 |
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On application - Rs. 20
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On First Call - Rs. 25
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What is the amount that will be transferred to the securities premium account?
If equity share of ₹ 10 each is issued at ₹ 12 each, it is called:
Assertion (A): A Company is Registered with an authorised Capital of 5,00,000 Equity Shares of ₹ 10 each of which 2,00,000 Equity shares were issued and subscribed. All the money had been called up except ₹ 2 per share which was declared as ‘Reserve Capital’. The Share Capital reflected in balance sheet as ‘Subscribed and Fully paid up’ will be Zero.
Reason (R): Reserve Capital can be called up only at the time of winding up of the company.
