Volume-2 | Chapter-1 | Question 61 to 65 | Issue of Share Capital | Ts grewal solution 2020-21 | Class-12th

Page No 8.120:

Question 61:



Answer:

Journal

Date

Particulars

L.F.

Debit

Amount

( `)

Credit

Amount

( `)

 

Building  A/c (70,000 × 10)

Dr.

 

7,00,000

 

 

  To M/s Star Ltd. A/c

 

 

 

7,00,000

 

(Being building bought)

 

 

 

 

 

 

 

 

 

 

 

M/s Star Ltd. A/c

Dr.

 

7,00,000

 

 

  To Equity Share Capital A/c

 

 

 

7,00,000

 

(Being purchase consideration paid in equity share of ` 10 each)

 

 

 

 

 

 

 

 

 

 

 

Bank A/c (2,00,000×3)

Dr.

 

6,00,000

 

 

  To Equity Share application A/c

 

 

 

6,00,000

 

(Being share application money received)

 

 

 

 

 

Equity Share application A/c

Dr.

 

6,00,000

 

 

  To Equity Share Capital A/c

 

 

 

6,00,000

 

(Being share application money transferred to share capital )

 

 

 

 

 

 

Equity Share Allotment A/c

(2,00,000 × 2)

Dr.

4,00,000

 

  To Equity Share Capital A/c

 

 

 

4,00,000

 

(Allotment money due)

 

 

 

 

 

Bank A/c

Dr.

4,00,000

 

  To Equity Share Allotment A/c

 

4,00,000

 

(Allotment money received)

 

 

 

 

 

Equity Share First Call A/c

(2,00,000 × 2)

Dr.

4,00,000

 

  To Equity Share Capital A/c

 

4,00,000

 

(Call money due)

 

 

 

 

 

Bank A/c (1,60,000 × 2)

Dr.

3,20,000

 

  To Equity Share First Call A/c

 

3,20,000

 

(Call money received)

 

 

 

 

 

Equity Share Second & final Call A/c

(2,00,000 × 3)

Dr.

6,00,000

 

  To Equity Share Capital A/c

 

6,00,000

(Call money due)

 

 

 

Bank A/c (1,00,000 × 3)

Dr.

3,00,000

 To Equity Share Second & final Call A/c

 

3,00,000

(Call money received except 1,00,000 shares)

 

 

 

 

Equity Share Capital A/c

     (10,000×10)

Dr.

1,00,000

 

  To Equity Share Allotment A/c

    (10,000×2)

20,000

 

  To Equity Share First Call A/c

     (10,000×2)

 

20,000

 To Equity Share Second & final Call A/c

      (10,000×3)

30,000

 To Equity share forfeiture A/c

      (10,000×3)

30,000

(Being 10,000 share forfeited)

Bank A/c

Dr,

1,20,000

 To Equity Share Capital A/c

 To Securities premium reserve a/c

1,00,000

20,000

(Being 10,000 forfeited shares, re-issued @ `12 per share fully paid-up)

Equity share forfeiture A/c

 To Capital Reserve A/c

Dr.

30,000

 

30,000

(Being balance of share forfeiture transferred to Capital reserve a/c)



Page No 8.120:

Question 62:

Midee  Ltd. invited applications for issuing 27,000 shares of  `  100 each payable  as follows:
      
`  50—per share on application;
     
`  10—per share on allotment; and
    Balance—on First and Final call.
Applications were received for 40,000 shares. Full allotment was made to the applicants of 7,000 shares. The remaining applicants were allotted 20,000 shares on pro rata basis. Excess money received on applications was adjusted towards allotment and call.
Asha, holding 600 shares was belonged  to the category of applicants to whom full allotment was made ,paid the call money at the time of allotment . Ankur, who belonged to the category of applicants to whom shares were allotted on pro rata basis  did not pay anything after application on his 200 shares . Ankur's shares were forfeited after the First and Final call. These shares were later reissued at  
`  105 per share as fully paid-up.
Pass necessary journal entries in the books of Midee Ltd . for the above transactions, by opening Calls-in-Arrears and Calls-in-Advance Accounts wherever necessary.



Answer:

Journal

Date

Particulars

L.F.

Debit

Amount

( `)

Credit

Amount

( `)

 

Bank A/c (40,000 × 50)

Dr.

 

20,00,000

 

 

  To Equity Share Application A/c

 

 

 

20,00,000

 

(Application money received)

 

 

 

 

 

 

 

 

 

 

 

Equity Share Application A/c

Dr.

 

20,00,000

 

 

  To Equity Share Capital A/c(27,000 × 50)

 

 

 

13,50,000

 

  To Calls in Advance A/c(13,000 × 50)

 

 

 

6,50,000

 

(Application money transferred)

 

 

 

 

 

 

 

 

 

 

 

Equity Share Allotment A/c (27,000 × 10)

Dr.

 

2,70,000

 

 

  To Equity Share Capital A/c

 

 

 

2,70,000

 

(Allotment money due)

 

 

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

94,000

 

 

Calls in Advance A/c

 

 

2,00,000

 

 

  To Equity Share Allotment A/c

 

 

 

2,70,000

 

  To Calls–in–Advance A/c

 

 

 

24,000

 

(Allotment money received)

 

 

 

 

 

 

 

 

 

 

 

Equity Share First Call A/c (27,000 × 40)

Dr.

 

10,80,000

 

 

  To Equity Share Capital A/c

 

 

 

10,80,000

 

(Call money due)

 

 

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

6,26,500

 

 

Calls–in–Advance A/c

Dr.

 

4,50,000

 

 

Calls–in–Arrears A/c

Dr.

 

3,500

 

 

  To Equity Share First Call A/c

 

 

 

10,80,000

 

(Call money received)

 

 

 

 

 

 

 

 

 

 

 

Equity Share Capital A/c

Dr.

 

20,000

 

 

  To Equity Share First Call A/c

 

 

 

3,500

 

  To Equity Share Forfeiture A/c

 

 

 

16,500

 

(200 shares forfeited)

 

 

 

 

 

 

 

 

 

 

 

Bank A/c (200 × 105)

Dr.

 

21,000

 

 

  To Equity Share Capital A/c

 

 

 

20,000

 

  To Securities Premium A/c

 

 

 

1,000

 

(Forfeited shares re–issued at  ` 105 per share)

 

 

 

 

 

 

 

 

 

 

 

Equity Share Forfeiture A/c

Dr.

 

16,500

 

 

  To Capital Reserve A/c

 

 

 

16,500

 

(Profit on re–issue transferred)

 

 

 

 



Page No 8.120:

Question 63:

A share of  ` 100 issued at a premium  of  ` 10 on which  ` 80 (including premium) was called and  ` 60 (including premium) was paid, has been forfeited. This share was afterwards reissued as fully paid-up for  ` 70 . Give Journal entries to record the above.



Answer:

Journal

Date

Particulars

L.F.

Debit

Amount

 `

Credit

Amount

 `

 

 

 

 

 

 

Share Capital A/c ( ` 80 – 10 premium)

Dr.

 

70

 

 

To Share Forfeiture ( ` 60 – 10 premium)

 

 

50

 

To Calls-In-Arrears A/c

 

 

20

 

(A share of  ` 100 on which  ` 70 called excluding the amount of securities premium  ` 10, forfeited for non-payment of  ` 20)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

70

 

 

Share Forfeiture A/c

Dr.

 

30

 

 

To Share Capital A/c

 

 

100

 

(A share of  ` 100 re-issued at  ` 70 as fully paid-up)

 

 

 

 

 

 

 

 

 

Share Forfeiture A/c

Dr.

 

20

 

 

To Capital Reserve A/c

 

 

20

 

(Balance in Share Forfeiture after re-issue transferred to Capital Reserve)

 

 

 

 

 

 

 

 



Page No 8.120:

Question 64:

Pass journal entries in the following cases:

M Ltd  forfeited 200 Equity Shares of 
`10 each , issued at a premium of   ` 5 per share , held by Ram for non-payment of the final call of   ` 3 per share . Of these , 100 shares were reissued  to Vishu at a discount of    ` 4 per share .



Answer:

 

Journal

Date

Particulars

L.F.

Debit

Amount

 `

Credit

Amount

 `

 

 

 

 

 

 

Equity Share Capital A/c

Dr.

 

20,000

 

 

To Share Forfeiture A/c (2,000 ×  ` 7)

 

 

14,000

 

To Calls-in-Arrears A/c

 

 

6,000

 

(2,000 shares of  ` 10 each forfeited for the non-payment of  ` 3 per share)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

600

 

 

Share Forfeiture A/c (100 ×  ` 4)

Dr.

 

400

 

 

To Equity Share Capital A/c

 

 

1,000

 

(100 shares of  ` 10 each reissued at  ` 6 per share as fully paid-up)

 

 

 

 

 

 

 

 

 

Share Forfeiture A/c

Dr.

 

300

 

 

To Capital Reserve A/c

 

 

300

 

(Balance in Share Forfeiture of 100 re-issued shares transferred to Capital Reserve )

 

 

 

 

 

 

 

 

 

Working Note-

Share Forfeiture of re-issued shares

Share Forfeiture

Cr.

 ` 7

per share

Share Forfeiture

Dr.

 ` 4

per share

Balance in share forfeiture after re-issue

Cr.

3

per share

Capital Reserve = Balance in Share Forfeiture after re-issue × No. of shares re-issued

= Re 3 × 100 shares

=  ` 300



Page No 8.120:

Question 65:

 VT Ltd forfeited 200 shares of  ` 10 each , issued at a premium of  ` 5 per share , held by Mohan for non-payment of the final call of  ` 3 per share . 100 out of these shares  were reissued to Narendra at a discount  of  ` 4 per share . Journalise.



Answer:

 

Books of VT Limited

Journal

Date

Particulars

L.F.

Debit

Amount

 `

Credit

Amount

 `

 

 

 

 

 

 

Share Capital A/c (200 ×  ` 10)

Dr.

 

2,000

 

 

To Share Forfeiture A/c (200 ×  ` 7)

 

 

1,400

 

To Calls-in-Arrears A/c

 

 

600

 

(200 shares of  ` 10 each forfeited for non-payment of  ` 3 each)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

600

 

 

Share Forfeiture A/c (100 ×  ` 4)

Dr.

 

400

 

 

To Share Capital A/c

 

 

1,000

 

(100 shares of  ` 10 each re-issued at  ` 6 per share fully paid-up)

 

 

 

 

 

 

 

 

 

Share Forfeiture A/c

Dr.

 

300

 

 

To Capital Reserve A/c

 

 

300

 

(Balance in share forfeiture of 100 shares transferred to capital reserve)

 

 

 

 

 

 

 

 

 

Working Notes:

 

Share Forfeiture of re-issued shares

Share Forfeiture Cr.

 ` 7

per share

Share Forfeiture Dr.

 ` 4

per share

Balance in Share Forfeiture after re-issue

 ` 3

per share

 

Capital Reserve

= Balance in Share Forfeiture after re-issue (per share) × No. of shares re-issued

 

= Re 3 × 100

 

=  ` 300

 


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