Page No 8.124:
Question 81:
XYZ Ltd . is
registered with an authorised capital of ` 2,00,000
divided into 2,000 shares of ` 100 each of which , 1,000 shares
were offered for public subscription at a premium of ` 5 per share
, payable as:
On application |
— |
`
10 per share, |
On allotment |
— |
` 25 per
share (including
premium), |
On first call |
— |
` 40 per
share |
On final call |
— |
` 30 per
share |
Applications were received for 1,800 shares, of which applications for 300
shares were rejected outright; the rest of the application
were allotted 1,000 shares on pro rata basis. Excess application money
was transferred to allotment.
All the money was duly received except from Sundar , holder of 100
shares, who failed to pay allotment and first call money. His shares were
later forfeited and reissued to Shyam at ` 60
per share ` 70 paid-up. Final call has
not been made.
Pass necessary Journal entries and prepare Cash Book in the books of XYZ Limited.
Answer:
Authorised
capital 2,000 shares of ` 100 each.
Issued
1,000 shares of ` 100 each at premium of ` 5
Applied
1,800 shares
Allotment made as: |
|
Amount
payable per shares as: |
|
|||
Applied |
|
Allotted |
|
Application |
` 10 |
|
1,500 |
|
1,000 |
|
Allotment |
` 25 |
(20
+ 5) |
300 |
|
NIL |
|
First
Call |
` 40 |
|
|
|
|
|
|
` 75 |
Called-up |
|
|
|
|
Final
Call |
` 30 |
|
1,800 |
|
1,000 |
|
|
` 105 |
|
Books of XYZ Limited Journal |
|||||
Date |
Particulars |
L.F. |
Debit Amount ` |
Credit Amount ` |
|
|
|
|
|
|
|
|
Share
Application A/c |
Dr. |
|
15,000 |
|
|
To Share Capital A/c |
|
|
10,000 |
|
|
To Share Allotment A/c |
|
|
5,000 |
|
|
(Share
application of 1,000 shares transferred to Share Capital, `
5,000 adjusted on allotment) |
|
|
|
|
|
|
|
|
|
|
|
Share
Allotment A/c |
Dr. |
|
25,000 |
|
|
To Share Capital A/c |
|
|
20,000 |
|
|
To Securities Premium
A/c |
|
|
5,000 |
|
|
(Share
allotment due on 1,000 shares at ` 25 each including ` 5 premium) |
|
|
|
|
|
|
|
|
|
|
|
Share
First Call A/c |
Dr. |
|
40,000 |
|
|
To Share Capital A/c |
|
|
40,000 |
|
|
(First
call due on 1,000 shares at ` 40 each) |
|
|
|
|
|
|
|
|
|
|
|
Securities
Premium A/c |
Dr. |
|
500 |
|
|
Share
Capital A/c |
Dr. |
|
7,000 |
|
|
To Share Forfeiture A/c |
|
|
1,500 |
|
|
To Share Allotment A/c |
|
|
2,000 |
|
|
To Share First Call A/c |
|
|
4,000 |
|
|
(100
shares of ` 100
each ` 70
called–up, forfeited for the non-payment of allotment and first call) |
|
|
|
|
|
|
|
|
|
|
|
Share
Forfeiture A/c |
Dr. |
|
1,000 |
|
|
To Share Capital A/c |
|
|
1,000 |
|
|
(100
shares of ` 100
each re-issued at ` 60
per share, ` 70
paid-up) |
|
|
|
|
|
|
|
|
|
|
|
Share
Forfeiture A/c |
Dr. |
|
500 |
|
|
To Capital Reserve A/c |
|
|
500 |
|
|
(Balance
in Share Forfeiture after re-issue transferred to Capital Reserve) |
|
|
|
|
|
|
|
|
|
Cash Book |
|||||||
Dr. |
|
Cr. |
|||||
Date |
Particulars |
Bank ` |
Date |
Particulars |
Bank ` |
||
|
|
|
|
|
|
||
|
Share
Application |
18,000 |
|
Share
Application |
3,000 |
||
|
Share
Allotment |
18,000 |
|
|
|
||
|
Share
First Call |
36,000 |
|
|
|
||
|
Share
Capital |
6,000 |
|
Balance
c/d |
75,000 |
||
|
|
78,000 |
|
|
78,000 |
||
|
|
|
|
|
|
||
Working Notes:
Number of share applied by Sunder |
= |
1,500×100/1,000 |
|
= |
150 shares |
Sunder
Money received on application 150 ×
` 10 |
= |
1,500 |
Money transferred to Share Capital
100 × ` 10 |
= |
1,000 |
Excess Money on application |
|
500 |
Share allotment due 100 × ` 25 |
= |
2,500 |
Less: Excess
money on application |
= |
500 |
Calls-in-Arrears on Allotment |
|
2,000 |
Allotment
Allotment due on all shares 1,000 ×
` 25 |
= |
25,000 |
Less: Adjustment of excess money on application |
= |
5,000 |
|
|
20,000 |
Less: Calls-in-Arrears by Sunder |
= |
2,000 |
Money received on allotment |
= |
18,000 |
Capital Reserve
Share Forfeiture |
Cr. |
1,500 |
Less: Share Forfeiture |
Dr. |
1,000 |
Balance in Share Forfeiture after
reissue |
|
500 |
Capital
Reserve = Balance in Share Forfeiture after re-issue
= ` 500
Page No 8.124:
Question 82:
A Ltd. invited applications for issuing 1,00,000 shares of ` 10 each at a premium of ` 1 per
share. The amount was payable as follows:
On Application |
– |
3 per share; |
On Allotment |
– |
3 per share (including premium); |
On First Call |
– |
3 per share; |
On Second and Final Call |
– |
Balance amount. |
Applications for 1,60,000 shares were received.
Allotment was made on the following basis:
(i) |
To applicants for 90,000 shares |
– |
40,000 shares; |
(ii) |
To applicants for 50,000 shares |
– |
40,000 shares; |
(iii) |
To applicants for 20,000 shares |
– |
Full shares. |
Excess
money paid on application is to be adjusted against the amount due on allotment
and calls.
Rishabh,
a shareholder, who applied for 1,500 shares and belonged to category (ii), did
not pay allotment, first and second and final call money.
Another
shareholder, Sudha, who applied for 1,800 shares and
belonged to category (i), did not pay the first and
second and final call money.
All
the shares of Rishabh and Sudha
were forfeited and were subsequently reissued at `
7 per share fully paid.
Pass
the necessary Journal entries in the books of A Ltd. Open
Calls-in-Arrears Account and Calls-in-Advance Account wherever required.
Answer:
In the books of A Ltd. Journal |
|||||
Date |
Particulars |
|
L.F. |
Debit Amount ( `) |
Credit Amount ( `) |
|
Bank A/c (1,60,000 × 3) |
Dr. |
|
4,80,000 |
|
|
To Share Application A/c |
|
|
|
4,80,000 |
|
(Being application money received on 1,60,000 shares) |
|
|
|
|
|
|
|
|
|
|
|
Share Application A/c |
Dr. |
|
4,80,000 |
|
|
To Share Capital A/c (1,00,000 × 3) |
|
|
|
3,00,000 |
|
To Call-in Advance A/c (4,80,000 – 3,00,000) |
|
|
|
1,80,000 |
|
(Being application money adjusted on 1,00,000 shares and
Excess treated as an advance) |
|
|
|
|
|
|
|
|
|
|
|
Share Allotment A/c (1,00,000 × 3) |
Dr. |
|
3,00,000 |
|
|
To Share Capital A/c (1,00,000 × 2) |
|
|
|
2,00,000 |
|
To Securities Premium Reserve A/c (1,00,000 × 1) |
|
|
|
1,00,000 |
|
(Being allotment money due) |
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
1,47,300 |
|
|
Calls-in-Advance A/c (1,20,000 + 30,000) |
Dr. |
|
1,50,000 |
|
|
Calls-in-Arrear A/c (1,200 × 3) – 900] |
Dr. |
|
2,700 |
|
|
To Share Allotment A/c |
|
|
|
3,00,000 |
|
(Being allotment money received after adjusting the excess
application money and non-payment on 1,200 shares) |
|
|
|
|
|
|
|
|
|
|
|
Share First Call A/c (1,00,000×3) |
Dr. |
|
3,00,000 |
|
|
To Share Capital A/c |
|
|
|
3,00,000 |
|
(Being first call money due) |
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
2,64,600 |
|
|
Calls-in-Advance A/c (1,80,000 – 1,50,000) |
Dr. |
|
30,000 |
|
|
Calls-in-Arrears A/c [3,600 + (2,400 – 600)] |
|
|
5,400 |
|
|
To Share First Call A/c |
|
|
|
3,00,000 |
|
(Being amount received on first call except on 2,000
shares) |
|
|
|
|
|
|
|
|
|
|
|
Share Second and Final Call A/c (1,00,000 × 2) |
Dr. |
|
2,00,000 |
|
|
To Share Capital A/c |
|
|
|
2,00,000 |
|
(Being share second and final call money due) |
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
1,96,000 |
|
|
Call-in-Arrears A/c (2,000 × 2) |
Dr. |
|
4,000 |
|
|
To Share Second and Final Call A/c |
|
|
|
2,00,000 |
|
(Being amount received on second and final call except on
2,000 shares) |
|
|
|
|
|
|
|
|
|
|
|
Share Capital A/c (2,000 × 10) |
Dr. |
|
20,000 |
|
|
Securities Premium Reserve A/c (1,200 × 1) |
Dr. |
|
1,200 |
|
|
To Share Forfeiture A/c [(3,600 + 900) + (800 × 5 + 600)] |
|
|
|
9,100 |
|
To Calls-in-Arrears A/c (2,700 + 5,400 + 4,000) |
|
|
|
12,100 |
|
(Being 2,000 shares forfeited for non-payment of amount
due) |
|
|
|
|
|
|
|
|
|
|
|
Bank A/c (2,000 × 7) |
Dr. |
|
14,000 |
|
|
Share Forfeiture A/c |
Dr. |
|
6,000 |
|
|
To Share Capital A/c |
|
|
|
20,000 |
|
(Being 2000 shares reissued at ` 7 per
share fully paid-up) |
|
|
|
|
|
|
|
|
|
|
|
Share Forfeiture A/c |
Dr. |
|
3,100 |
|
|
To Capital Reserve A/c (9,100 – 6,000) |
|
|
|
3,100 |
|
(Being capital gain on reissued shares transferred) |
|
|
|
|
Working Notes:
Computation Table |
|||||||
Categories |
Shares Applied |
Shares Allotted |
Money received on Application @ ` 3 |
Money Transferred to Share Capital @ ` 3 |
Allotment due @ ` 3(including premium of ` 1) |
Excess on Application |
Refund |
I |
90,000 |
40,000 |
2,70,000 |
1,20,000 |
1,20,000 |
1,50,000 |
Nil |
II |
50,000 |
40,000 |
1,50,000 |
1,20,000 |
1,20,000 |
30,000 |
Nil |
III |
20,000 |
20,000 |
60,000 |
60,000 |
60,000 |
– |
Nil |
|
|
|
|
|
|
|
|
Particulars |
Shares Allotted |
Shares Applied |
Excess on Application |
Money adjusted in calls |
Rishabh- Category
(ii) |
(1,500×40,000/50,000)
=1,200 |
1,500 |
900 |
– |
Sudha- Category
(i) |
(1,800×40,000/90,000) = 800 |
1,800 |
3,000 |
600 |
Page No 8.124:
Question 83:
Ruchi
Ltd. issued for public subscription 40,000 Equity Shares of ` 10 each at a premium
of
` 2 per share payable as:
On application |
— |
` 2 per
share; |
||
On allotment |
— |
` 5 per
share (including premium), |
||
On first call |
— |
` 2 per
share, |
||
On second and final call |
— |
` 3 per
share. |
||
Applications were received for 60,000 shares. Allotment was made on pro
rata basis to the applicants for 48,000 shares, the remaining applications
being refused. Money overpaid on application was utilised
towards sums due on allotment. Ram to whom 1,600 shares were allotted failed to
pay the allotment money and Shyam to whom 2,000
shares were allotted failed to pay the two calls. These shares were
subsequently forfeited after the second and final call was made. All the
forfeited shares were reissued as fully paid-up @ ` 8 per share.
Give necessary Journal entries for the above transactions.
Answer:
Issued
capital 40,000 shares of ` 10 each at premium of ` 2
Applied ` 60,000 shares
Allotment
made as: |
|
Payable as: |
|
|
||
Applied |
|
Allotted |
|
Application |
` 2 |
|
48,000 |
|
40,000 |
|
Allotment |
` 5 |
(3+2) |
12,000 |
|
NIL |
|
First Call |
` 2 |
|
60,000 |
|
40,000 |
|
Second and Final Call |
` 3 |
|
|
|
|
|
|
`12 |
(10+2) per share |
Books of Ruchi Limited |
|||||
Date |
Particulars |
L.F. |
Debit Amount ( `) |
Credit Amount ( `) |
|
|
|
|
|
|
|
|
Bank
A/c |
Dr. |
|
1,20,000 |
|
|
To Equity Share
Application A/c |
|
|
1,20,000 |
|
|
(Application
money received for 60,000 shares at ` 2 each) |
|
|
|
|
|
|
|
|
|
|
|
Equity
Share Application A/c |
Dr. |
|
1,20,000 |
|
|
To Equity Share Capital
A/c |
|
|
80,000 |
|
|
To Equity Share
Allotment A/c |
|
|
16,000 |
|
|
To Bank A/c |
|
|
24,000 |
|
|
(Share
application of 40,000 shares transferred to share capital, `
16,000 adjusted on allotment and remaining ` 24,000 refunded) |
|
|
|
|
|
|
|
|
|
|
|
Equity
Share Allotment A/c |
Dr. |
|
2,00,000 |
|
|
To Equity Share Capital
A/c |
|
|
1,20,000 |
|
|
To Securities Premium
A/c |
|
|
80,000 |
|
|
(Share
allotment due on 40,000 shares at ` 5 each including ` 2 premium) |
|
|
|
|
|
|
|
|
|
|
|
Bank
A/c |
Dr. |
|
1,76,640 |
|
|
To Equity Share Allotment
A/c |
|
|
1,76,640 |
|
|
(Share
allotment received on all shares except on 1,600 Shares held by Ram) |
|
|
|
|
|
|
|
|
|
|
|
Equity
Share First Call A/c |
Dr. |
|
80,000 |
|
|
To Equity Share Capital
A/c |
|
|
80,000 |
|
|
(First
call due on 40,000 shares at ` 2 each) |
|
|
|
|
|
|
|
|
|
|
|
Bank
A/c |
Dr. |
|
72,800 |
|
|
To Equity Share First
Call A/c |
|
|
72,800 |
|
|
(First
call received on 36,400 shares and holders of 3,600 failed to pay it) |
|
|
|
|
|
|
|
|
|
|
|
Equity
Share Second and Final Call A/c |
Dr. |
|
1,20,000 |
|
|
To Equity Share Capital
A/c |
|
|
1,20,000 |
|
|
(Second
and final call due on 40,000 shares at ` 3 each) |
|
|
|
|
|
|
|
|
|
|
|
Bank
A/c |
Dr. |
|
1,09,200 |
|
|
To Equity Share second
and Final Call A/c |
|
|
1,09,200 |
|
|
(Second
and final call received on 36,400 shares and holders of 3,600 shares failed
to pay it) |
|
|
|
|
|
|
|
|
|
|
|
Equity
Share Capital A/c |
Dr. |
|
16,000 |
|
|
Securities
Premium A/c |
Dr. |
|
3,200 |
|
|
To Share Forfeiture A/c |
|
|
3,840 |
|
|
To Equity Share
Allotment A/c |
|
|
7,360 |
|
|
To Equity Share first
Call A/c |
|
|
3,200 |
|
|
To Equity Share Second
and Final Call A/c |
|
|
4,800 |
|
|
(1600
shares held by Ram forfeited for non-payment amount due including premium) |
|
|
|
|
|
|
|
|
|
|
|
Equity
Share Capital A/c |
Dr. |
|
20,000 |
|
|
To Equity Share
Forfeiture A/c |
|
|
10,000 |
|
|
To Equity Share First
Call A/c |
|
|
4,000 |
|
|
To Equity Share Second
and Final Call A/c |
|
|
6,000 |
|
|
(2,000
shares held by Shyam forfeited for non-payment of
amount due) |
|
|
|
|
|
|
|
|
|
|
|
Bank
A/c |
Dr. |
|
28,800 |
|
|
Share
Forfeiture A/c |
Dr. |
|
7,200 |
|
|
To Equity Share Capital
A/c |
|
|
36,000 |
|
|
(3,600
shares of ` 10
each re-issued at ` 8
per share fully paid-up) |
|
|
|
|
|
|
|
|
|
|
|
Share
Forfeiture A/c |
Dr. |
|
6,640 |
|
|
To Capital Reserve A/c |
|
|
6,640 |
|
|
(Balance
in Share Forfeiture transferred to Capital Reserve) |
|
|
|
|
|
|
|
|
|
Working Notes:
Ram’s shares
Number
of shares applied by Ram =48,000/40,000×1,600=1,920 Shares
Money
received on Application (1,920 shares × ` 2) |
= |
`
3,840 |
Less: Application money transferred to Share Capital (1,600 shares × ` 2) |
= |
`
3,200 |
Excess
money on Application |
= |
` 640 |
Share
Allotment due (1,600 shares × ` 5) |
` |
8,000 |
Less: Excess money on Application |
` |
640 |
Calls-in-Arrears
on Allotment |
` |
7,360 |
Share Allotment
Share
Allotment due (40,000 shares × ` 5) |
2,00,000 |
Less: Excess money on Application |
16,000 |
|
1,84,000 |
Less: Calls-in-Arrears by Ram |
7,360 |
Money
received on Allotment |
1,76,640 |
Share First Call
Share
First Call due (40,000 shares × ` 2) |
80,000 |
Less: Calls-in-Arrears by Ram and Shyam
(3,600 shares ×
` 2) |
7,200 |
Money
received on First Call |
72,800 |
Share Final Call
Share
Final Call due 40,000 Shares × ` 3 |
1,20,000 |
Less: Calls-in-Arrears by Ram and Shyam
(3,600 shares × ` 3) |
10,800 |
Money
received on Second and Final Call |
1,09,200 |
Capital Reserve
Share
Forfeiture on Ram’s shares (money received on application) |
3,840 |
|
Share
Forfeiture on Shyam’s shares (2,000
shares × ` 5) |
10,000 |
|
|
13,840 |
Cr. |
Less: Share Forfeiture |
7,200 |
Dr. |
Capital
Reserve |
6,640 |
|
Page No 8.125:
Question 84:
Competent
Ltd. issued a prospectus inviting applications for 50,000 Equity Shares of ` 10
each, payable ` 5 as
per application (including ` 2 as
premium),
` 4 as per allotment and the balance
towards first and final call.
Applications
were received for 65,000 shares. Application money received on 5,000 shares was
refunded with letter of regret and allotments were made on pro rata
basis to the applicants of 60,000 shares. Money overpaid on applications
including premium was adjusted on account of sums due on allotment.
Mr.
Sharma to whom 700 shares were allotted failed to pay
the allotment money and his shares were forfeited by the Directors on
his subsequently failure to pay the call money.
All
the forfeited shares were subsequently sold to Mr. Jain credited as fully
paid-up for `
9 per share.
You
are required to set out the Journal entries and the relevant entries in the
Cash Book.
Answer:
Issued
shares 50,000 of ` 10 each at a premium of ` 2
Applied
share 65,000
Allotment
made as |
|
Payable as: |
|
|||
Applied |
|
Allotted |
|
Application |
` 5 |
(3
+ 2) |
60,000 |
|
50,000 |
|
Allotment |
` 4 |
|
5,000 |
|
NIL |
|
First
and Final Call |
` 3 |
|
65,000 |
|
50,000 |
|
|
` 12 |
(10
+ 2) per share |
Books of Competent Ltd. |
|||||||
Dr. |
Cash Book |
Cr. |
|||||
Date |
Particulars |
L.F. |
Bank ` |
Date |
Particulars |
L.F. |
Bank ` |
|
|
|
|
|
|
|
|
|
Equity
Share Application |
|
3,25,000 |
|
Equity
Share Application |
|
25,000 |
|
Equity
Share Allotment |
|
1,47,900 |
|
|
|
|
|
Equity
Share First and Final Call |
|
1,47,900 |
|
Balance
c/d |
|
6,02,100 |
|
Equity
Share Capital |
|
6,300 |
|
|
|
|
|
|
|
6,27,100 |
|
|
|
6,27,100 |
|
|
|
|
|
|
|
|
Books of X Limited Journal |
|||||
Date |
Particulars |
L.F. |
Debit Amount ` |
Credit Amount ` |
|
|
|
|
|
|
|
|
Equity
Share Application A/c |
Dr. |
|
3,00,000 |
|
|
To Equity Share Capital
A/c |
|
|
1,50,000 |
|
|
To Securities Premium |
|
|
1,00,000 |
|
|
To Equity Share
Allotment A/c |
|
|
50,000 |
|
|
(Share
application money of 50,000 shares transferred to share capital at ` 3
each and to premium ` 2
each and `
50,000 adjusted on allotment) |
|
|
|
|
|
|
|
|
|
|
|
Equity
Share Allotment A/c |
Dr. |
|
2,00,000 |
|
|
To Equity Share Capital
A/c |
|
|
2,00,000 |
|
|
(Allotment
due on 50,000 shares at ` 4 each) |
|
|
|
|
|
|
|
|
|
|
|
Equity
Share First and Final Call A/c |
Dr. |
|
1,50,000 |
|
|
To Equity Share Capital
A/c |
|
|
1,50,000 |
|
|
(First
and final call due on 50,000 shares at ` 3 each) |
|
|
|
|
|
|
|
|
|
|
|
Equity
Share Capital A/c |
Dr. |
|
7,000 |
|
|
To Share Forfeiture A/c |
|
|
2,800 |
|
|
To Equity Share
Allotment A/c |
|
|
2,100 |
|
|
To Equity Share First
and Final A/c |
|
|
2,100 |
|
|
(700
shares of ` 10
each forfeited for the non-payment of amount due) |
|
|
|
|
|
|
|
|
|
|
|
Share
Forfeiture A/c |
Dr. |
|
700 |
|
|
To Equity Share Capital
A/c |
|
|
700 |
|
|
(Loss
on issue Re 1 on 700 shares charged from the Share Forfeiture Account) |
|
|
|
|
|
|
|
|
|
|
|
Share
Forfeiture A/c |
Dr. |
|
2,100 |
|
|
To Capital Reserve A/c |
|
|
2,100 |
|
|
(Balance
in Share Forfeiture after re-issue transferred to Capital Reserve) |
|
|
|
|
|
|
|
|
|
Working Notes-
Mr. Sharma’s Share
Number
of shares applied by Mr Sharma = 60,000/50,000×700=840 shares
Money
received on Application 840 shares × ` 5 |
= |
4,200 |
Less: Money transferred to Share Capital 700 shares × ` 3 |
= |
2,100 |
Less: Securities Premium 700 shares × ` 2 |
= |
1,400 |
Excess
money on Application |
|
700 |
Allotment
due 700 shares × ` 4 |
= |
2,800 |
Less: Excess money on Application |
|
700 |
Calls-in
Arrears on Allotment |
|
2,100 |
Share Allotment
Share
Allotment due 50,000 × ` 4 |
= |
2,00,0000 |
Less: Excess money on Application |
= |
50,000 |
Less: Calls-in-Arrears |
= |
2,100 |
Money
received on Application |
|
1,47,900 |
Share First and Final Call
Share
First and Final Call due 50,000 Shares × ` 3 |
= |
1,50,000 |
Less: Calls in Arrears on 700 shares × ` 3 |
= |
2,100 |
Money
received on First and Final Call |
|
1,47,900 |
Capital Reserve
Money
received on Application from Mr Sharma |
= |
`
4,200 |
|
Less: Securities Premium 700 × ` 2 |
= |
`
1,400 |
|
Share
Forfeiture |
Cr. |
|
2,800 |
Share
Forfeiture 700 × Re 1 |
Dr. |
|
700 |
Capital
Reserve |
|
2,100 |
Page No 8.125:
Q85
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