Issue of Shares Practical Problems and Solutions
B.Com 2nd and 4th Semeseter CBCS Pattern
2010
(b) ABC Co. Ltd. issued prospectus inviting
applications for 20000 shares of Rs 10 each at a premium of Rs 2 per share as
follows:
On Application – Rs 3
On Allotment – Rs 5 (including premium)
On First Call – Rs 2
On Second Call – Rs 2
Applications were received for 30000 shares and
allotment made pro-rata to the applicants of 24000 shares. Money overpaid on
application was employed on account of sums due on allotment. Mr. Rajat, to
whom 400 shares were allotted, failed to pay the allotment money and on his
subsequent failure to pay the first call, his shares were forfeited. Mr. Kamal,
the holder of 600 shares failed to pay both the calls and his shares were
forfeited after second call. Of the shares forfeited, 800 shares were issued to
Mr. Anand, credited as fully paid for Rs 9 per share, the whole of Mr. Rajat’s
shares being included. Pass the necessary Journal Entries to give effect to the
above and prepare Bank A/c, Forfeited Shares A/c and Balance Sheet of the
company.
Ans:
Journal Entries
In the Books of ABC Co. Ltd
|
Date |
Particulars |
L/f |
Amount |
Amount |
|
(i) |
Bank A/c (30,000 x 3) Dr. To
Share Application A/c (Being application money received on 30,000 shares@ Rs.3 per
share) |
|
90,000 |
90,000 |
|
(ii) |
Share Application A/c Dr. To
Share Capital A/c (20,000 x 3) To
Bank A/c (6,000 x 3) To
Share Allotment A/c (4,000 x 3) (Being transfer of application money on 20,000 shares @ Rs. 3
per share to Share Capital Account and re-funded application money to
applicants of 6,000 shares @ Rs. 3 per share and balance adjusted on
allotment) |
|
90,000 |
60,000 18,000 12,000 |
|
(iii) |
Share Allotment A/c (20,000 x 5) Dr. To
Share Capital A/c To
Securities Premium Reserve (20,000 x 2) (Being allotment money due on 20,000 shares @ Rs. 5 per share
including premium of Rs. 2 per share) |
|
1,00,000 |
60,000 40,000 |
|
(iv) |
Bank A/c Dr. Calls in arrear A/c Dr. To
Share Allotment A/c (1,00,000 – 12,000) (Being receipt of balance of allotment money) |
|
86,240 1,760 |
88,000 |
|
(v) |
Share 1st Call A/c (20,000 x 2) Dr. To
Share Capital A/c (Being first call due on 20,000 shares @ Rs. 2 per share) |
|
40,000 |
40,000 |
|
(vi) |
Bank A/c Dr. Calls in arrear A/c (1,000 x 2) Dr. To
Share 1st Call A/c (Being receipt of first call money on 19,000 shares @ Rs. 2 per
share) |
|
38,000 2,000 |
40,000 |
|
(vii) |
Share Capital A/c Dr. Securities Premium Reserve A/c (400 x 2) Dr. To
Forfeited Share A/c [(400 x 3) + 240] To
Calls in arrear A/c [(400 x 7) – 240] (Being forfeiture of 400 shares held by Mr. Rajat’s for
non-payment of allotment money and first call money) |
|
3,200 800 |
1,440 2,560 |
|
(viii) |
Share Final Call A/c Dr. To Share Capital A/c (20,000 – 400) = 19,600 x 2 (Being final call due on 19,600 share @ Rs. 2 share) |
|
39,200 |
39,200 |
|
(ix) |
Bank A/c Dr. Calls in arrear A/c (600 x 2) Dr. To
Share Final Call A/c (Being receipt of final call money on 19,000 shares @ Rs. 2 per
share) |
|
38,000 1,200 |
39,200 |
|
(x) |
Share Capital A/c Dr. To
Forfeited Share a/c (600 x 6) To
Calls in Arrear A/c (600 x 4) (Being forfeiture of 600 shares held by Mr. Kamal for non-
payment of first call @ Rs. 2 and final call @ Rs. 2 per share) |
|
6,000 |
3,600 2,400 |
|
(xi) |
Bank A/c (800 x 9) Dr. Forfeited Share A/c (800 x 1) Dr. To
Share Capital A/c (Being 800 shares out of 1,000 forfeited shares reissued @ Rs. 9
at a discount of Rs. 1 per share) |
|
7,200 800 |
8,000 |
|
(xii) |
Forfeited Share A/c Dr. To
Capital Reserve A/c (Being balance of Forfeited Shares Account on 800 shares
transferred to Capital Reserve Account) |
|
3,040 |
3,040 |
Bank Account
|
Particulars |
Amount |
Particulars |
Amount |
|
To Share Application A/c To Share Allotment A/c To Share First Call A/c To Share Second & Final Call A/c To Share Capital A/c (Reissue of 800 forfeited shares @ Rs.
9) |
90,000 86,240 38,000 38,000 7,200 |
By Share Application A/c By Balance c/d |
18,000 2,41,440 |
|
2,59,440 |
2,59,440 |
||
|
|
|
Forfeited Shares Account
|
Particulars |
Amount |
Particulars |
Amount |
|
To Share Capital Account To Capital Reserve Account To Balance c/d |
800 3,040 1,200 |
By Share Capital Account By Share Capital Account |
1,440 3,600 |
|
5,040 |
5,040 |
||
|
|
|
Balance
Sheet
As on 31st
March
|
Particulars |
L/F |
Amount |
|
I.
Equity and Liabilities 1. Shareholder
fund a) Share
Capital 19,800 shares @ Rs. 10 each 200 forfeited share b) Reserve & Surplus Capital Reserve Securities Premium Reserve |
|
1,98,000 1,200 3,040 39,200 |
|
Total |
|
2,41,440 |
|
II.
Assets 1. Current Assets a) Cash & Cash equivalent |
|
2,41,440 |
|
Total |
|
2,41,440 |
Working Note:
|
1. Calculation of Calls in arrear Share allotted = 400 Share applied = 400 x 6/5 = 480 Excess application money = 80 x 3 = 240 (Amount due or allotment) Calls in arrear = 400 x 5 = 2,000 Less: applied money =
(240) 1,760 |
2. Calculation of Capital Reserve: Forfeited share (Cr.) MR. Rajat = 1,440 Mr. Kamal (3,600 x 400/600)
= 2,400 3,840 Less: Forfeited share (Dr.) 800 3,040 |
2014
3. (a) PMS Ltd. Has an authorised capital of Rs. 15,00,000 in 15,000
Equity Shares of Rs. 100 each. The company issued 10,000 shares at a premium of
Rs. 20 per share payable us under:
|
Particulars |
Rs. |
|
On
Application (including premium) |
40 |
|
On
Allotment |
40 |
|
On First
Call |
20 |
|
On Final
Call |
20 |
(i) Regret letters were issued to the
applicants for 3000 shares and money refunded.
(ii) Full allotment was made to the applicants
for 6000 shares
(iii) The rest of the shares were allotted to
the applicants for next 6000 shares on pro-rata basis, the excess application
money being adjusted against amount due on allotment.
All money due was received except one
shareholder named A to whom 100 shares were allotted on pro-rata basis, failed
to pay his allotment money. His subsequent failures to pay the first call, his
shares were forfeited. Another shareholder named B to whom 200 shares were
allotted failed to pay both the calls and his shares were forfeited after the
final call. Out of the above forfeited shares, 200 shares (including 50 shares
of A) were reissued at Rs. 90 each as fully paid. Pass necessary Journal Entries in the books
of the company.
Journal Entries
|
Date |
Particulars |
L/F |
Amount |
Amount |
|
(i) |
Bank A/c (15,000 x 40)
Dr. To
Share Application A/c (Being the application money received on 15,000 shares @ Rs. 40
each including premium of Rs 20 per share) |
|
6,00,000 |
6,00,000 |
|
(ii) |
Share application A/c
Dr. To
Share Capital A/c (10,000 x 20) To
Bank A/c (3,000 x 40) To
Share Allotment A/c (2,000 x 40) To
Securities Premium Reserve A/c (10,000 x 20) (Being the application money transferred to share capital and
excess money adjusted) |
|
6,00,000 |
2,00,000 1,20,000 80,000 2,00,000 |
|
(iii) |
Share allotment A/c (10,000 x 40) Dr. To
Share Capital A/c (Being the allotment money due on 10,000 shares @ Rs. 40 each) |
|
4,00,000 |
4,00,000 |
|
(iv) |
Bank A/c Dr. Calls in arrear A/c Dr. To
Share Allotment A/c (4,00,000 – 80,000) (Being the allotment money received on 9,900 share after
adjusting excess application money) |
|
3,18,000 2,000 |
3,20,000 |
|
(v) |
Share 1st Call A/c Dr. To
Share Capital A/c (10,000 x 20) (Being the first call money due on 10,000 shares @ Rs. 20 each) |
|
2,00,000 |
2,00,000 |
|
(vi) |
Bank A/c Dr.
Calls in arrear A/c (300 x 20) Dr. To
Share 1st call A/c (Being the first call money received on 9,700 shares) |
|
1,94,000 6,000 |
2,00,000 |
|
(vii) |
Share Capital A/c
Dr. To
Forfeited Share A/c (100 x 20 + 2,000) To
Calls in arrear A/c (100 x 60 – 2,000) (Being the 100 shares forfeited due to non-payment of allotment
and first call money) |
|
8,000 |
4,000 4,000 |
|
(viii) |
Share Final Call A/c Dr. To Share Capital A/c (10,000 – 100)
= 9,900 x 20 (Being the final call money due on 9,900 share @ Rs. 20 each) |
|
1,98,000 |
1,98,000 |
|
(ix) |
Bank A/c Dr. Calls in arrear A/c (200 x 20) Dr. To
Share Final Call A/c (Being the final call money received on 9,700 shares @ Rs. 20
each) |
|
1,94,000 4,000 |
1,98,000 |
|
(x) |
Share Capital A/c
Dr. To
Forfeited Share A/c (200 x 60) To
Calls in arrear A/c (200 x 40) (Being the 200 shares forfeited due to non-payment of first and
final call money) |
|
20,000 |
12,000 8,000 |
|
(xi) |
Bank A/c Dr. (200 x 90) Dr. Forfeited Share A/c (200 x 10) Dr. To
Share Capital A/c (Being the 200 forfeited shares re-issued@ Rs. 90 each) |
|
18,000 2,000 |
20,000 |
|
(xii) |
Forfeited Share A/c
Dr. To
Capital Reserve A/c (Being the profit on re-issue of forfeited shares transferred to
capital reserve) |
|
9,000 |
9,000 |
Balance Sheet
|
Particulars |
L/F |
Amount |
|
I. Equity and
Liabilities 1. Shareholder fund a) Share
Capital Authorised Share Capital (15,000 Shares @ Rs. 100
each) Subscribed, Called up and paid-up capital 9,900 shares @ Rs. 100 each 100 forfeited share b) Reserve
& Surplus Capital Reserve Securities Premium Reserve |
|
15,00,000 |
|
9,90,000 5,000 9,000 2,00,000 |
||
|
Total |
|
12,04,000 |
|
2. Assets Current Assets Cash & Cash equivalent |
|
12,04,000 |
|
Total
|
|
12,04,000 |
|
Working Note: 1. Calculation of calls in arrear: Share allotted = 100 Share applied = 100 x 3/2 = 150 Excess application money = 50 x 40 = 2,000 Now, Amount due on allotment = 100 x 40 (Calls in arrear) = 4,000 Less: applied money (2,000) 2,000 |
2. Calculation of Capital Reserve: Forfeited share (Cr.) A = 4,000 x 50/100 = 2,000 B = 12,000 x 150/200 = 9,000 11,000 Less: Forfeited shares (Dr.) 2,000 9,000 |
2015
3. (a) Dhanshiri Co. Ltd. Issued 30000 shares
of Rs. 100 each at a premium of 10% payable as under: -
On
Application – Rs. 30
On
Allotment – Rs. 60 (including premium)
On Call – Rs. 20
Bitul, holding 1000 shares failed to pay the allotment and call
money. Ratul, holding 1800 shares failed to pay the call money. All these
shares were forfeited and subsequently 1900 shares (including 900 shares of
Ratul) reissued as fully paid-up for 80 per share. Give Journal Entries to
record the above transactions and show the Balance Sheet of the company.
Journal Entries
In the books of Dhanshri Co. Ltd
|
Date |
Particulars |
L/F |
Amount |
Amount |
|
(i) |
Bank A/c (30,000 x 30)
Dr. To
Share Application A/c (Being the application money received on 30,000 shares @ Rs. 30
each) |
|
6,00,000 |
6,00,000 |
|
|
Share Application A/c Dr. To Share Capital A/c (Being the application money transferred to share capital account) |
|
6,00,000 |
6,00,000 |
|
(ii) |
Share Allotment A/c
Dr. To
Share Capital A/c (30,000 x 50) To
Securities Premium Reserve A/c (30,000 x 10) (Being the allotment money due on 30,000 shares @ Rs. 60 each
including premium @ Rs. 10 per share) |
|
18,00,000 |
15,00,000 3,00,000 |
|
(iii) |
Bank A/c
Dr. Calls in arrear A/c (1,000 x 60) Dr. To
Share Allotment A/c (Being the allotment money received on 29,000 shares) |
|
17,40,000 60,000 |
18,00,000 |
|
(iv) |
Share Final Call A/c Dr. To
Share Capital A/c (30,000 x 20) (Being the final call money due on 30,000 shares @ Rs. 20 each) |
|
6,00,000 |
6,00,000 |
|
(v) |
Bank A/c
Dr. Calls in arrear A/c (2,800 x 20) Dr. To
Share Final Call A/c (Being the final call money received on 27,200 shares @ Rs. 20
each) |
|
5,44,000 56,000 |
6,00,000 |
|
(vi) |
Share Capital A/c (2,800*100) Dr. Securities Premium Reserve A/c (1,000 x 10) Dr. To
Forfeited Share A/c (1000 x 30+1800x80) To
Calls in arrear A/c (Being the 2,800 shares forfeited due to non-payment of allotment
and call money) |
|
2,80,000 10,000 |
1,74,000 1,16,000 |
|
|
Bank A/c Dr. Forfeited Shares A/c Dr. To Share Capital A/c (Being the 1,900 forfeited shares reissued @ Rs. 80 each) |
|
1,52,000 38,000 |
1,90,000 |
|
(viii) |
Forfeited Shares A/C Dr. To Capital Reserve A/c (Being the profit on re-issue of forfeited shares
transferred to capital reserve) |
|
64,000 |
64,000 |
2015 old
course, 2008 Major Paper
3. (a) XYZ Co. invited applications for 10,000
shares of Rs. 100 each. The shares were issued at a premium of 10%. The amount
was payable as follows:
On
Application – Rs. 20
On
Allotment – Rs. 40 (including premium of Rs. 10)
The balance on first and final call
Applications for 15000 shares were received. Applications for 3000
shares were rejected and allotment was made to the remaining applicants on
pro-rata basis. All calls were made and were duly received except the final
call on 100 shares. These shares were forfeited and reissued at Rs. 110 per
shares as fully paid up. Pass necessary
Journal Entries and prepare the Balance Sheet in the books of the XYS Co.
Journal
Entries
In
the books of XYZ Co. Ltd
|
Particulars |
L/F |
Amount (Dr.) |
Amount (Cr.) |
|
Bank A/c (15,000 x 20) Dr. To Share Application A/c (Being the application money received on 15,000
shares @ Rs. 20 each) |
|
3,00,000 |
3,00,000 |
|
Share Application A/c Dr. To Share Capital A/c (10,000 x 20) To Bank A/c (3000 x 20) To Share Allotment A/c (2,000 x 20) (Being the application money transferred to share
capital account and excess application money refunded and balance transferred
to allotment) |
|
3,00,000 |
2,00,000 60,000 40,000 |
|
Share Allotment a/c Dr. To Share Capital A/c (10,000 x 30) To Securities Premium Reserve A/c (10,000 x 10) (Being the allotment money due on 10,000 shares @
Rs. 40 each including premium of Rs. 10 per share) |
|
4,00,000 |
3,00,000 1,00,000 |
|
Bank A/c Dr. To Share Allotment a/c (Being the allotment money received on 10,000
shares after adjusting excess application money) |
|
3,60,000 |
3,60,000 |
|
Share 1st & Final Call A/c Dr. To Share Capital A/c (10,000 x 50) (Being the first and final call money due on 10,000
shares @ Rs. 50 each) |
|
5,00,000 |
5,00,000 |
|
Bank A/c Dr. Calls in arrear A/c (100 x 50) Dr. To share 1st & Final Call A/c (Being the first & final call money received on
9,900 shares) |
|
4,95,000 5,000 |
5,00,000 |
|
Share Capital A/c Dr. To forfeited Share A/c (100 x 50) To Calls in arrear A/c (100 x 50) (Being the
9,900 shares forfeited due to non-payment of first and final call
money) |
|
10,000 |
5,000 5,000 |
|
Bank A/c Dr. To Share Capital A/c (1000 x 10) To Securities Premium Reserve A/c (100 x 10) (Being the 1,000 forfeited shares re-issued @ Rs.
110 per share) |
|
11,000 |
10,000 1,000 |
|
Forfeited Share A/c Dr. To Capital Reserve A/c (Being the profit on re-issue of forfeited shares
transferred to capital reserve) |
|
5,000 |
5,000 |
Balance
Sheet of XYZ Co Ltd
|
Particulars |
Amount |
|
A. Equity &
Liabilities: 1. Share Holders Fund: Share Capital: 10,000 shares @ Rs. 100 each 2. Reserves &
Surplus: Securities Premium Reserves Capital Reserve |
10,00,000 1,01,000 5,000 |
|
Total |
11,06,000 |
|
B. Assets: Cash & Cash Equivalents |
11,06,000 |
|
Total |
11,06,000 |
2016
3. (a) A company invited the public to
subscribe for 1,00,000 equity shares of Rs. 10 each at a premium of Rs. 1 per
share payable on allotment. Payments were to be made as follows:
On
application – Rs. 3 per share.
On
allotment – Rs. 3 per share.
On
first call – Rs. 3 per share.
On final call – Rs. 2 per share.
Applications were received for 1,30,000
shares. Applications for 20,000 shares were rejected and allotment was made proportionately
to the remaining applicants. Both the calls were made and all the money
received expect the final call on 3,000 shares which were forfeited after due
notice. Later on these shares were reissued as fully paid at Rs. 8.50 per
share. Pass Journal Entries in the books of the company.
Journal
Entries
|
Particulars |
L/F |
Amount (Dr.) |
Amount (Cr.) |
|
Bank A/c
Dr. To Equity Share Application A/c (Being the application money received on 1,30,000 shares @ Rs. 3
per share) |
|
3,90,000 |
3,90,000 |
|
Equity Share Application A/c Dr. To Equity Share Capital a/c To Bank A/c (20,000 x 3) To Equity Share Allotment a/c (10,000 x 3) (Being the application money on 1,00,000 shares
transferred to equity share capital and excess adjusted) |
|
3,90,000 |
3,00,000 60,000 30,000 |
|
Equity Share Allotment A/c Dr. To Equity Share Capital A/c To Securities Premium Reserve A/c (Being the allotment money due on 1,00,000 shares @
Rs.3 per share including premium @ Rs. 1 per share) |
|
3,00,000 |
2,00,000 1,00,000 |
|
Bank A/c
Dr. To Equity Share Allotment A/c (Being the allotment money received on 1,00,000
after adjusting excess application money) |
|
2,70,000 |
2,70,000 |
|
Equity Share 1st Call A/c
Dr. To Equity Share Capital a/c (Being the first call money due on 1,00,000 shares
@ Rs. 3 per share) |
|
3,00,000 |
3,00,000 |
|
Bank A/c
Dr. To Equity Share 1st Call A/c (Being the first call money received on 1,00,000
shares @ Rs. 3 per share) |
|
3,00,000 |
3,00,000 |
|
Equity Share Final Call A/c Dr. To Equity Share Capital A/c (Being the final call money due on 1,00,000 shares
@ Rs. 2 per share) |
|
2,00,000 |
2,00,000 |
|
Bank A/c Dr. Calls in arrear A/c Dr. To Equity Share Final Call A/c (Being the final call money received on 97,000
shares @ Rs. 2 per share) |
|
1,94,000 6,000 |
2,00,000 |
|
Equity Share Capital A/c Dr. To Forfeited Share A/c (3,000 x 8) To Calls in arrear A/c (3,000 x 2) (Being the 3,000 shares forfeited due to
non-payment of final call) |
|
30,000 |
24,000 6,000 |
|
Bank A/c (3,000 x 8.50) Dr. Forfeited Share A/c (3,000 x 1.50) Dr. To Equity Share Capital a/c (Being the 3,000 forfeited shares reissued @ Rs.
8.5 per share) |
|
25,500 4,500 |
30,000 |
|
Forfeited share A/c Dr. To Capital Reserve A/c (Being the profit on reissue of forfeited shares
transferred to capital reserve) |
|
19,500 |
19,500 |
2017
3. (a) Luit Co. Ltd. issued 10000 shares of Rs. 100
each at a premium of 10% payable as under:
On Application – Rs. 30
On Allotment – Rs. 60 (including
premium)
On Call – Rs. 20
Bikash holding 700 shares failed to pay the call
money. The company forfeited his shares and reissued them to Jatin as fully
paid up at Rs. 90 per share. Give Journal entries to record the above
transactions and show the Balance Sheet of the company.
Journal
Entries
In
the books of Luit Co. Ltd
|
Particulars |
L/F |
Amount (Dr.) |
Amount (Cr.) |
|
Bank A/c (10,000 x 30) Dr. To Share Application A/c (Being the application money received on 10,000
shares @ Rs. 30 each) |
|
3,00,000 |
3,00,000 |
|
Share Application A/c
Dr. To Share Capital A/c (Being the application money of 10,000 shares of
Rs. 30 each transferred to share capital account) |
|
3,00,000 |
3,00,000 |
|
Share Allotment a/c Dr. To Share Capital A/c (10,000 x 50) To Securities Premium Reserve A/c (10,000 x 10) (Being the allotment money due on 10,000 shares @
Rs.60 each including premium of Rs. 10 per share) |
|
6,00,000 |
5,00,000 1,00,000 |
|
Bank A/c Dr. To Share Allotment a/c (Being the allotment money received on 10,000
shares @ Rs. 60 each) |
|
6,00,000 |
6,00,000 |
|
Share 1st & Final Call A/c Dr. To Share Capital A/c (10,000 x 20) (Being the first and final call money due on 10,000
shares @ Rs.20 each) |
|
2,00,000 |
2,00,000 |
|
Bank A/c Dr. Calls in arrear A/c (700 x 20) Dr. To share 1st & Final Call A/c (Being the first and final call money received on
9,300 shares) |
|
1,86,000 14,000 |
2,00,000 |
|
Share Capital A/c Dr. To forfeited Share A/c (700x 80) To Calls in arrear A/c (700 x 20) (Being the 700 shares forfeited due to nonpayment
of first and final call) |
|
70,000 |
56,000 14,000 |
|
Bank A/c Dr. Forfeited shares A/c Dr. To Share Capital A/c (Being the 700 forfeited shares reissued @ Rs. 90
each) |
|
63,000 7,000 |
70,000 |
|
Forfeited Share A/c
Dr. To Capital Reserve A/c (Being the profit on reissue of forfeited shares
transferred to capital reserve) |
|
49,000 |
49,000 |
Balance
Sheet of Luit Co. Ltd
|
Particulars |
Amount |
|
A. Equity &
Liabilities: 1. Share Holders Fund: Share Capital: 10,000 shares @ Rs. 100 each Reserves & Surplus: Securities Premium Reserve Capital Reserve |
10,00,000 1,00,000 49,000 |
|
Total |
11,49,000 |
|
B. Assets: Cash & Cash Equivalents |
11,49,000 |
|
Total |
11,49,000 |
2019
3. (a) Blue Bird Co. Ltd. issued 50,000 equity shares of Rs. 100
each at a premium of 10% payable as under:
|
On application On allotment On call |
Rs. 30 Rs. 60 (including premium) Rs. 20 |
Bikram holding 1,500 shares failed to pay call money. The company
forfeited his shares and later on 1,000 of these shares reissued to Prakash as
fully paid up at Rs. 85 per share. Give Journal Entries to record the
above transactions and show the Balance Sheet of the company.
Journal
Entries
In
the books of Blue Bird Co. Ltd
|
Particulars |
L/F |
Amount (Dr.) |
Amount (Cr.) |
|
Bank A/c (50,000 x 30)
Dr. To Share Application A/c (Being the application money received on 50,000
shares @ Rs. 30 each) |
|
15,00,000 |
15,00,000 |
|
Share Application A/c
Dr. To Share Capital A/c (Being the application money of 50,000 shares of
Rs. 30 each transferred to share capital account) |
|
15,00,000 |
15,00,000 |
|
Share Allotment a/c
Dr. To Share Capital A/c (50,000 x 50) To Securities Premium Reserve A/c (50,000 x 10) (Being the allotment money due on 50,000 shares @
Rs.60 each including premium of Rs. 10 per share) |
|
30,00,000 |
25,00,000 5,00,000 |
|
Bank A/c
Dr. To Share Allotment a/c (Being the allotment money received on 50,000
shares @ Rs. 60 each) |
|
30,00,000 |
30,00,000 |
|
Share 1st & Final Call A/c
Dr. To Share Capital A/c (50,000 x 20) (Being the first and final call money due on 50,000
shares @ Rs.20 each) |
|
10,00,000 |
10,00,000 |
|
Bank A/c
Dr. Calls in arrear A/c (1,500 x 20) Dr. To share 1st & Final Call A/c (Being the first and final call money received on 48,500
shares) |
|
9,70,000 30,000 |
10,00,000 |
|
Share Capital A/c
Dr. To forfeited Share A/c (1,500x 80) To Calls in arrear A/c (1,500 x 20) (Being the 1,500 shares forfeited due to nonpayment
of first and final call) |
|
1,50,000 |
1,20,000 30,000 |
|
Bank A/c
Dr. Forfeited shares A/c
Dr. To Share Capital A/c (Being the 1,000 forfeited shares reissued @ Rs. 85
each) |
|
85,000 15,000 |
1,00,000 |
|
Forfeited Share A/c
Dr. To Capital Reserve A/c (Being the profit on reissue of forfeited shares
transferred to capital reserve) |
|
65,000 |
65,000 |
Balance
Sheet of Blue Bird Co. Ltd
|
Particulars |
Amount |
|
A. Equity &
Liabilities: 1. Share Holders Fund: Share Capital: 49,5000 shares @ Rs. 100 each 500 Forfeited Shares Reserves & Surplus: Securities Premium Reserve Capital Reserve |
49,50,000 40,000 5,00,000 65,000 |
|
Total |
55,55,000 |
|
B. Assets: Cash & Cash Equivalents |
55,55,000 |
|
Total |
55,55,000 |
2005
3. (a) Moonlight Ltd. Has an authorized capital of
Rs. 250000 in 25000 equity shares of Rs. 10 each. The company issued 4000
shares as fully paid in payments of building purchased. 8000 shares where
subscribed for by the public and during the first year only Rs 5 per share was
called up Payable Rs. 2 on application, 1 on allotment, 1 on first call and Rs.
1 second call. The amount received of these shares was as follows:
On 6000 shares full
amount
On 1250 shares 4
per share
On 500 shares 3
per share
On 250 shares 2
per share
The director forfeited the shares on which less than Rs. 4 per share
had been paid. Give the journal entries to record the above transactions and
prepared also the Balance Sheet of the Company.
Journal
Entries
In
the books of Moonlight Ltd.
|
Date |
Particulars |
L/F |
Amount (Dr.) |
Amount (Cr.) |
|
|
Building A/c
Dr. To Vendor’s A/c (Being the Building purchased.) |
|
40,000 |
40,000 |
|
|
Vendor’s A/c
Dr. To Share Capital A/c (Being the payment of Building made by issuing 4,000 share @ Rs.
10 each.) |
|
40,000 |
40,000 |
|
|
Bank A/c
Dr. To Share Application A/c (Being the application money received on 8,000 share @ Rs. 2
each.) |
|
16,000 |
16,000 |
|
|
Share Application A/c Dr. To Share Capital A/c (Being the application money on 8,000 share @ Rs. 2 each
transferred to share capital A/c.) |
|
16,000 |
16,000 |
|
|
Share Allotment A/c Dr. To Share Capital A/c (Being the allotment money due on 8,000 share @ Rs. 1 each.) |
|
8,000 |
8,000 |
|
|
Bank A/c Dr. Calls-in-arrear A/c
Dr. To Share Allotment A/c (Being the 7,750 share @ Rs. 1 each received for allotment money.) |
|
7,750 250 |
8,000 |
|
|
Share 1st Call A/c Dr. To Share Capital A/c (Being the 1st Call money due on 8,000 shares @ Rs. 1 each.) |
|
8,000 |
8,000 |
|
|
Bank A/c
Dr. Calls-in-arrear A/c
Dr. To Share Capital A/c (Being the 1st Call money received on 7,250 shares @ Rs. 1 each.) |
|
7,250 750 |
8,000 |
|
|
Share 2nd & final call A/c Dr. To Share Capital A/c (Being the 2nd call money due on 8,000 shares @ Rs. 1 each.) |
|
8,000 |
8,000 |
|
|
Bank A/c
Dr. Calls-in-arrear A/c
Dr. To Share 2nd & final call A/c (Being the 2nd call money received on 6,000 shares @ Rs. 1 each.) |
|
6,000 2,000 |
8,000 |
|
|
Share Capital A/c
Dr. To Forfeited Share A/c (500 x 3) To Calls-in-arrear A/c (500 x 2) (Being the 500 shares forfeited @ Rs. 5 each due to non-payment of
1st and 2nd call money.) |
|
2,500 |
1,500 1,000 |
|
|
Share Capital A/c Dr. To Forfeited Share A/c (250 x 2) To Calls-in-arrear A/c (250 x 3) (Being the 250 shares forfeited @ Rs. 5 each due to non-payment of
allotment, first and second call money.) |
|
1,250 |
500 750 |
|
|
Bank A/c (750 x 3) Dr. Forfeited Share A/c (750 x 2) Dr. To Share Capital A/c (Being the 750 share reissue @ Rs. 3 each as a paid up @ Rs. 5
each.) |
|
2,250 1,500 |
3,750 |
|
|
Forfeited Share A/c Dr. To Capital Reserve A/c (Being the profit on forfeited share transferred to Capital
Reserve A/c.) |
|
500 |
500 |
Balance
Sheet of Moonlight Ltd.
|
Particulars |
Amount |
|
A. Equity &
Liabilities: 1. Shareholders fund a) Share Capital Authorized Capital (25,000 share @ Rs. 10 each) |
2,50,000 |
|
Issued Capital (12,000 share @ Rs. 10 each) |
1,20,000 |
|
Subscribed Capital (12,000 share @ Rs. 10 each) |
1,20,000 |
|
Called up & paid up
Capital 4,000 share @ Rs. 10 each = 40,000 8,000 share @ Rs. 5 each =
40,000
80,000 Less: Call-in-arrear 1,250 |
78,750 |
|
Reserve & Surplus: Capital Reserve |
500 |
|
Total
Liabilities |
79,250 |
|
B. Assets: 1. Non-Current Assets a) Fixed assets Tangible Fixed assets 2. Current Assets Cash & Cash equivalent |
40,000 29,250 |
|
Total
Assets |
79,250 |
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