Page No 8.125:
Question 86:
Nitro
Paints Ltd. invited applications for issuing 1,60,000 equity shares of ` 10 each at a premium of ` 3 per
share. The amount was payable as follows:
On application |
— |
` 6 per
share(including premium `1); |
On allotment |
— |
` 3 per
share(including premium ` 1); and |
The balance |
— |
On First and Final call. |
Applications for 1,80,000 shares were received .Applications for
10,000 shares were rejected and pro rata allotment was made to the
remaining applicants.Over payment received on application was adjusted
towards sums due on allotment . All calls were made and were duly received
except allotment and final call from Aditya who was allotted 3,200
shares. His shares were forfeited . Half of the forfeited shares were reissued
for `
43,000 as fully paid-up .
Pass necessary journal entries for the above transactions in the books of Nitro
Paints Ltd.
Answer:
Journal |
|||||
Date |
Particulars |
L.F. |
Debit Amount ( `) |
Credit Amount ( `) |
|
|
Bank A/c (1,80,000 × 6) |
Dr. |
|
10,80,000 |
|
|
To Equity Share Application A/c |
|
|
|
10,80,000 |
|
(Application money received) |
|
|
|
|
|
|
|
|
|
|
|
Equity Share Application A/c |
Dr. |
|
10,80,000 |
|
|
To Equity Share Capital A/c (1,60,000 × 5) |
|
|
|
8,00,000 |
|
To Securities Premium Reserve A/c (1,60,000 × 1) |
|
|
|
1,60,000 |
|
To Share Allotment A/c(10,000×6) |
|
|
|
60,000 |
|
To Bank A/c (10,000×6) |
|
|
|
60,000 |
|
(Application money transferred) |
|
|
|
|
|
|
|
|
|
|
|
Equity Share Allotment A/c (1,60,000 × 3) |
Dr. |
|
4,80,000 |
|
|
To Equity Share Capital A/c (1,60,000 × 2) |
|
|
|
3,20,000 |
|
To Securities Premium Reserve A/c (1,60,000 × 1) |
|
|
|
1,60,000 |
|
(Allotment money due) |
|
|
|
|
|
|
|
|
|
|
|
Bank A/c (4,80,000 ─ 60,000 ─ 8,400) |
Dr. |
|
4,11,600 |
|
|
To Equity Share Allotment A/c |
|
|
|
4,11,600 |
|
(Allotment money received) |
|
|
|
|
|
|
|
|
|
|
|
Equity Share First Call A/c (1,60,000 × 4) |
Dr. |
|
6,40,000 |
|
|
To Equity Share Capital A/c |
|
|
|
4,80,000 |
|
To Securities Premium Reserve A/c |
|
|
|
1,60,000 |
|
(Call money due) |
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
6,27,200 |
|
|
To Equity Share First Call A/c |
|
|
|
6,27,200 |
|
(Call money received) |
|
|
|
|
|
|
|
|
|
|
|
Equity Share Capital A/c (3,200 × 10) |
Dr. |
|
32,000 |
|
|
Securities Premium Reserve A/c (3,200 × 2) |
Dr. |
|
6,400 |
|
|
To Equity Share Allotment A/c |
|
|
|
8,400 |
|
To Equity Share First & Final Call A/c |
|
|
|
12,800 |
|
To Equity Share Forfeiture A/c |
|
|
|
17,200 |
|
(3,200 shares forfeited) |
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
43,000 |
|
|
To Equity Share Capital A/c |
|
|
|
16,000 |
|
To Securities Premium A/c |
|
|
|
27,000 |
|
(1,600 shares re–issued) |
|
|
|
|
|
|
|
|
|
|
|
Equity Share Forfeiture A/c |
Dr. |
|
8,600 |
|
|
To Capital Reserve A/c |
|
|
|
8,600 |
|
(Profit on re-issue transferred) |
|
|
|
|
|
|
|
|
|
Working Notes:
Shares Applied by Aditya=1,70,000/1,60,000×3,200=3,400
Amount unpaid by Aditya on Allotment |
|
Application money received |
20,400 |
Less: Transferred to Share Capital |
(19,200) |
Excess received on Application |
1,200 |
Allotment money due |
9,600 |
Less: Excess adjustment |
(1,200) |
Amount unpaid by Aditya |
8,400 |
Page No 8.125:
Question 87:
Raja
Ltd. invited applications for issuing 50,000 Equity Shares of ` 10 each . The amount was payable as follows:
On
application
—
` 3 per share, |
Applications
for 70,000 shares were received . Allotment was made to all applicants on
pro rata basis. Excess money received on application was adjusted towards
sums due on allotment . Ramesh, who had applied for 700 shares , did not pay
the allotment money and on his failure to pay the allotment money his shares
were forfeited. Afterwards , the first and the final call was made . Adhar, who
had been allotted 500 shares, did not pay the first and final call . His shares
were also forfeited . Out of the forfeited shares 900 shares were reissued
at ` 8 per share as fully paid-up
. The reissued shares included all the shares of Ramesh.
Pass necessary journal entries for the above transactions in the books of
the company.
Answer:
Journal |
|
|||||
Date |
Particulars |
L.F. |
Debit Amount ` |
Credit Amount ` |
||
|
Bank A/c (3×70,000) |
Dr. |
|
2,10,000 |
|
|
|
To
Equity Share Application A/c |
|
|
|
2,10,000 |
|
|
(Application money on 70,000 shares received) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share Application A/c |
Dr. |
|
2,10,000 |
|
|
|
To
Equity Share Capital A/c (3×50,000) |
|
|
|
1,50,000 |
|
|
To
Equity Share Allotment A/c (WN2) |
|
|
|
60,000 |
|
|
(Share Application money on 50,000 shares
transferred to share capital account and excess was utilised on allotment) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share Allotment A/c |
Dr. |
|
2,50,000 |
|
|
|
To
Equity Share Capital A/c |
|
|
|
2,50,000 |
|
|
(Allotment money due on allotment) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c (WN2) |
Dr. |
|
1,88,100 |
|
|
|
To
Equity Share Allotment A/c |
|
|
|
1,88,100 |
|
|
(Allotment money received on 49,500 shares and `
60,000 excess money adjusted) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share Capital A/c |
Dr. |
|
4,000 |
|
|
|
To Equity Share Allotment A/c(WN1) |
|
|
|
1,900 |
|
|
To Equity Share Forfeiture A/c(WN1) |
|
|
|
2,100 |
|
|
(500 shares forfeited for non payment of allotment
money |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share First and Final Call A/c |
Dr. |
|
99,000 |
|
|
|
To
Equity Share Capital A/c |
|
|
|
99,000 |
|
|
(Share Call money due) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
98,000 |
|
|
|
To Equity Share First and Final Call
A/c |
|
|
|
98,000 |
|
|
(Call money received on 49,000 shares) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share Capital A/c |
Dr. |
|
5,000 |
|
|
|
To Equity Share First and Final Call
A/c |
|
|
|
1,000 |
|
|
To Equity Share Forfeiture A/c (8×500) |
|
|
|
4,000 |
|
|
(500 shares forfeited for non payment of Call money) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
7,200 |
|
|
|
Equity Share Forfeiture A/c |
Dr. |
|
1,800 |
|
|
|
To Equity Share Capital |
|
|
|
9,000 |
|
|
(900 shares reissued at ` 8
per share) |
|
|
|
|
|
|
(Share call money received and Calls-in-Advance
money adjusted) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Forfeiture A/c (WN3) |
Dr. |
|
3,500 |
|
|
|
To Capital Reserve A/c |
|
|
|
3,500 |
|
|
(Profit on forfeiture of shares transferred) |
|
|
|
|
|
|
|
|
|
|
|
|
Working Note:
1.
Share
applied by Ramesh = 700 shares |
|
|
Share
allotted 700×50,000 / 70,000 = 500 shares |
|
|
Application
money received from Ramesh 700×3 |
= |
2,100 |
Less
application money due on allotted shares 500×3 |
= |
(1,500) |
Excess
application money adjusted on allotment |
= |
600 |
|
|
|
Allotment
money due on shares allotted 5×500 |
= |
2500 |
Less
excess application on money received= |
= |
( 600) |
Allotment
money due but not received |
= |
1900 |
2.
Allotment
Dew (gross) 50,000×5 |
= |
2,50,000 |
Less:
Adjusted |
= |
(60,000) |
Less:
Arrears |
= |
(1,900) |
|
|
1,88,100 |
3.
Forfeiture
of 500 shares issued to Aadhar
Amount
due on first and final call: 2×500 =1,000 |
|
|
Total
amount due on first and final call: 2×49,500 |
= |
99,000 |
Less-
areas |
= |
1,000 |
|
|
98,000 |
Share
forfeiture on Ramesh share |
= |
2,100 |
proportionate
share for feature on others share 4,000×400/500 |
= |
3,200 |
|
|
5,300 |
Less
- loss on Re-issue |
= |
1,800 |
Profit
on reissue transferred to Capital Reserve |
= |
3,500 |
Page No 8.126:
Question 88:
XYZ Ltd. invited applications for issuing 50,000 Equity Shares
of `10 each . The amount was
payable as:
On application |
— |
` 3 per
share, |
On allotment |
— |
` 4 per
share, |
On first and final call |
— |
` 3 per
share. |
Applications were received for 75,000 shares and pro rata allotment
was made as:
Applicants for 40,000 shares were allotted 30,000 shares on pro rata basis.
Applicants for 35,000 shares were allotted 30,000 shares on pro rata
basis.
Ramu, to whom 1,200 shares were allotted out of the group applying for 40,000
shares, failed to pay the allotment money. His shares were forfeited
immediately after allotment .
Shamu, who had applied for 700 shares out of the group applying for 35,000
shares , failed to pay the first and final call . His shares were also
forfeited. Out of the forfeited shares, 1,000 shares were reissued
@ Applicants for 40,000 shares were allotted 30,000 shares on pro rata
basis. 8 per share as fully paid-up. The reissued shares included all the
forfeited shares of Shamu.
Pass necessary Journal entries to record the above transactions.
Answer:
Issued
1,000 equity shares of ` 10
each
Applied
1,800 shares
Allotment made as: |
|
Amount
payable per shares as: |
|||
Applied |
|
Allotted |
|
Application |
` 3 |
40,000 |
|
30,000 |
|
Allotment |
` 4 |
35,000 |
|
20,000 |
|
First
Call |
` 3 |
1,800 |
|
1,000 |
|
|
` 10 |
Books of XYZ Limited Journal Entries |
|||||
Date |
Particulars |
L.F. |
Debit Amount ` |
Credit Amount ` |
|
|
|
|
|
|
|
|
Bank
A/c |
Dr. |
|
2,25,000 |
|
|
To Equity Share
Application A/c |
|
|
2,25,000 |
|
|
(Share
application money received for 75,000 shares at ` 3
each) |
|
|
|
|
|
|
|
|
|
|
|
Equity
Share Application A/c |
Dr. |
|
2,25,000 |
|
|
To Equity Share Capital
A/c |
|
|
1,50,000 |
|
|
To Equity Share
Allotment A/c |
|
|
75,000 |
|
|
(Application
money of 50,000 shares transferred to share capital and the remaining amount
adjusted on allotment) |
|
|
|
|
|
|
|
|
|
|
|
Equity
Share Allotment A/c |
Dr. |
|
2,00,000 |
|
|
To Equity Share Capital
A/c |
|
|
2,00,000 |
|
|
(Share
allotment due on 50,000 shares at ` 4 each) |
|
|
|
|
|
|
|
|
|
|
|
Bank
A/c |
Dr. |
|
1,21,400 |
|
|
To Equity Share
Allotment A/c |
|
|
1,21,400 |
|
|
(Share
allotment received on 48,800 shares after adjusting the excess money on
application) |
|
|
|
|
|
|
|
|
|
|
|
Equity
Share Capital A/c (1,200 × ` 7) |
Dr. |
|
8,400 |
|
|
To Share Forfeiture A/c |
|
|
4,800 |
|
|
To Equity Share
Allotment A/c |
|
|
3,600 |
|
|
(1,200
shares of ` 10
each ` 7
called-up forfeited for the non-payment of allotment) |
|
|
|
|
|
|
|
|
|
|
|
Equity
Share First and Final Call A/c |
Dr. |
|
1,46,400 |
|
|
To Equity Share Capital
A/c |
|
|
1,46,400 |
|
|
(First
and final call due on 48,800 shares at ` 3 each) |
|
|
|
|
|
|
|
|
|
|
|
Bank
A/c |
Dr. |
|
1,45,200 |
|
|
To Equity Share First
and Final Call A/c |
|
|
1,45,200 |
|
|
(Share
first and call received 48,800 shares at ` 3 each) |
|
|
|
|
|
|
|
|
|
|
|
Equity
Share Capital A/c |
Dr. |
|
4,000 |
|
|
To Share Forfeiture A/c
(400 × ` 7) |
|
|
2,800 |
|
|
To Equity Shares First
and Final Call A/c |
|
|
1,200 |
|
|
(400
shares forfeited for the non-payment of first and final call) |
|
|
|
|
|
|
|
|
|
|
|
Bank
A/c |
Dr. |
|
8,000 |
|
|
Share
Forfeiture A/c |
Dr. |
|
2,000 |
|
|
To Equity Share Capital
A/c |
|
|
10,000 |
|
|
(1,000
shares of ` 10
each re-issued at ` 8
per share fully paid-up) |
|
|
|
|
|
|
|
|
|
|
|
Share
Forfeiture A/c |
Dr. |
|
3,200 |
|
|
To Capital Reserve A/c |
|
|
3,200 |
|
|
(Balance
of 1,000 re-issued shares in Share Forfeiture Account transferred to Capital
Reserve Account) |
|
|
|
|
|
|
|
|
|
Working Notes-
Rumu’s Share
Number
of shares applied = 40,000/30,000×1,200 =
1,600 shares
Money
received on Application 1,600 shares × ` 3 |
= |
`
4,800 |
Money
adjusted on Application 1,200 Shares × ` 3 |
= |
`
3,600 |
Excess
on Application |
|
`
1,200 |
Allotment
due on 1,200 shares × ` 4 |
= |
4,800 |
Less: Excess money on Application |
= |
1,200 |
Calls-in-Arrears
on Allotment |
|
3,600 |
Share Allotment
Share
Allotment due 50,000 shares × ` 4 |
= |
2,00,000 |
Less: Excess money on application |
= |
75,000 |
|
|
1,25,000 |
Less: Calls-in-Arrears on Allotment |
= |
3,600 |
Money received on Allotment |
= |
1,21,400 |
Shamu’s Shares
Number
of shares allotted to Shamu =20,000/35,000×700 =
400 shares
First and Final Call
First
and Final Call due; 48,800 shares × ` 3 |
= |
1,46,400 |
Less: Calls-in-Arrears by Shamu; 400 shares × ` 3 |
= |
1,200 |
Money received on of First and Final Call |
|
1,45,200 |
Capital Reserve
Shares
re-issued out the shares forfeited from Ramu = 1,000 shares − Shamu’s
shares
=
1,000 − 400
=
600 shares
on
re-isssue Ramu’s shares:
Capital
Reverse on re-issue of 600 shares forfeited from Ramu |
||||
Share Forfeiture Cr. 4,800/1,200 |
= |
` |
4 |
|
Share Forfeiture Dr. |
= |
` |
2 |
|
Share Forfeiture after re-issued |
|
` |
2 |
per
share |
Capital
Reserve after re-issue of 600 shares = Share Forfeiture after re-issue (per
share) × 600 shares
= ` 2 ×
600
= ` 1,200
on
re-isssue Shamu’s shares:
Share
Forfeiture |
Cr. |
` 7 |
|
Share
Forfeiture |
Dr. |
` 2 |
|
Share
Forfeiture after re-issue |
` 5 |
per
share |
Capital
Reserve after re-issue of 400 shares = Share Forfeiture after re-issue (per
share) × 600 shares
= ` 5 ×
400
= ` 2,000
Total
amount of Capital Reserve = Capital Reserve of 600 shares + Capital Reserve of
400 shares
Total
amount of Capital Reserve |
=
Capital Reserve of 600 shares + Capital Reserve of 400 shares |
|
= `
1,200 + `
2,000 |
|
= `
3,200 |