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Question
XYZ Ltd. invited applications for 40,000 equity shares of Rs.100 each at a discount of 6%. The amount was payable as follows:
On Application and Allotment - Rs.90 per share
On First and Final call - the balance amount.
Applications for 60,000 shares were received. Applications for 10,000 shares were rejected and shares were allotted on pro-rata basis to remaining applicants. Excess application money received on application and allotment was adjusted towards sums due on first and final call. The calls were made. A shareholder, who applied for 50 share, failed to pay the first and final call money. His shares were forfeited. All the forfeited shares were re-issued at Rs.97 per share fully paid up. Pass necessary journal entries for the above transactions in the books of XYZ Ltd.
Solution
Journal Entries
| Date | Particulars | L.F. | Debit (Rs.) | Credit (Rs.) |
|
Bank A/c Dr. To Equity Share Application and Allotment A/c (Being application money received on 60,000 shares)
Share Application and Allotment A/c Dr. Discount on Issue of Share A/c Dr. To Equity share capital A/c To Equity share First and Final Call A/c To Bank A/c (Being application and allotment money is transferred adjusted and the refund is done)
Equity Share First and Final Call A/c Dr. To Equity share capital A/c (Being first call due on 40,000 shares) |
54,00,000
54,00,000 2,40,000
1,60,000
|
54,00,000
38,40,000 1,60,000 16,40,000
1,60,000
|
Important Note: This question can't be solved further because the shar ehold er has already paid excess amount than required on first and final call as he has applied for 50 shares and 40 shares are allotted to him `[40000/50000xx50=40]`
Calculation of excess amount received from him
Amount received =50 × 90 = Rs.4,500
Less: Amount that is to be received= 40 × 90 = Rs.3,600
Excess money received = Rs.900
Amount due on first and final call = 40 x 4 = Rs.160
Now, he has already paid the amount of its 900 in excess at the time of application and allotment. Thus, forfeiture is not possible in this case.
Thus, this question has incomplete or wrong information, hence, cannot be solved fully.
Amount paid by 50,000 shares = Rs.45,00,000
Less: Amount that is required to be paid = Rs.36,00,000
Excess Application money received = Rs.9,00,000
Less: Amount due on first and final call = Rs.1,60,000
Amount refunded through bank = Rs.7,40,000
Add: Amount to be refunded = Rs.9,00,000
Total = Rs.16,40,000
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Answer in one Sentence only :
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Based on the below information, you are required to answer the following question:
|
Nidiya Limited was incorporated on 1st April 2017 with a registered office in Mumbai. The capital clause of the memorandum of Association reflected a registered capital of 8,00,000 equity shares of ₹ 10 each and 1,00,000 preference shares of ₹ 50 each. Since some large investments were required for building and machinery the company in consultation with vendors, M/s VPS Enterprises, issued 1,00,000 equity shares and 20,000 preference shares at par with them in full consideration of assets acquired. Besides this, the company issued 2,00,000 equity shares for cash at par payable as ₹ 3 on application, 2 on the allotment, 3 on the first call and 2 on the second call. Till date, the second call has not yet been made and all the shareholders have paid except Mr. Ajay who did not pay allotment and calls on his 300 shares and Mr. Vipul who did not pay the first call on his 200 shares. Shares of Mr. Ajay were then forfeited and out of the 100 shares were reissued at ₹ 12 per share. |
What amount of share forfeiture would be reflected in the balance sheet?
A Company forfeited 1,000 shares of ₹ 10 each, ₹ 7 called up for non-payment of first call of ₹ 2 per share. All these shares were reissued at ₹ 5 per share ₹ 7 paid-up. The amount transferred to Capital Reserve Account was:
Hero Ltd. was registered with a capital of ₹ 5,00,000 divided into 20,000 shares of ₹ 25 each, payable as:
| On Application | ₹ 5 per share |
| On Allotment | ₹ 10 per share |
| On Call | The Balance |
The company offered to the public for subscription 10,000 shares. It received applications for 11,100 shares.
From amongst the applicants:
- Vimal, who had applied for 1,200 shares, paid ₹ 6,000 on application. but was allotted only 600 shares.
- Mohan applied for 1,000 shares, paid the full amount of ₹ 25,000 with his application but was allotted only 500 shares.
- Vineet, who had applied for 1,500 shares, paid his application and allotment money in order but did not pay the call money.
- The remaining applicants paid as and when due.
The surplus money paid by both Vimal and Mohan was used towards allotment and call and any surplus beyond the call was refunded. The company forfeited Vineet’s shares and later re-issued 500 of the forfeited shares @ ₹ 20 per share fully paid up.
You are required to pass journal entries in the books of Hero Ltd.
