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Question
Vairam Ltd. issued 60,000 shares of ₹ 10 each at a premium of ₹ 2 per share payable as follows:
On application ₹ 6
On allotment ₹ 4 (including premium)
On the first and final call ₹ 2
The issue was fully subscribed and the amount due was received except Saritha to whom 1,000 shares were allotted who failed to pay the allotment money and first and final call money. Her shares were forfeited. All the forfeited shares were reissued to Parimala at ₹ 7 per share.
Solution
| Date | Particulars | L.F. | Debit Rs. | Credit Rs. |
| (1) | Bank A/c (60,000 × Rs. 6) Dr. To share application A/c [Share application money received] |
3,60,000 | 3,60,000 | |
| (2) | Share application A/c Dr. To Share capital A/c [Application money transferred] |
3,60,000 | 3,60,000 | |
| (3) | Share Allotment A/c (60,000 × Rs. 4) Dr. To Securities premium A/c (60,000 × Rs. 2) To share capital A/c (60,000 × Rs. 2) [Allotment money due] |
2,40,000 | 1,20,000 1,20,000 | |
| (4) | Bank A/c (59,000 × Rs. 4) Dr. To Share allotment A/c [Allotment money received with the exception on 1,000 share] |
2,36,000 | 2,36,000 | |
| (5) | Share I & final call A/c (60,000 × Rs. 2) Dr. To share capital A/c [call money due] |
1,20,000 | 1,20,000 | |
| (6) | Bank A/c (59,000 × Rs. 2) Dr. To share I & final call A/c [Call money received exception 1,000 share] |
1,18,000 | 1,18,000 | |
| (7) | Share capital A/c (1,000 × Rs. 10) Dr. Securities Premium (1,000 × Rs. 2) Dr. To share Allotment A/c (1,000 × Rs. 2) To share I & final call A/c (1,000 × Rs. 2) To Forfeited shares A/c (1,000 × Rs. 6) [Forfeiture of shares made] |
10,000 2,000 | 4,000 2,000 6,000 |
|
| (8) | Bank A/c (1,000 × Rs. 7) Dr. Forfeited share A/c (1,000 × Rs. 3) Dr. To Share capital A/c [Reissue of forfeited shares] |
7,000 3,000 |
10,000 | |
| (9) | Forfeited shares A/c Dr. To capital reserves A/c [Profit on reissue transferred] |
3,000 | 3,000 |
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