Issue of Shares Practical Problems and Solutions 2005 to 2019

Issue of Shares Practical Problems and Solutions
B.Com 2nd and 4th Semeseter CBCS Pattern

Isuse of Shares solved practical problems which is very useful for B. Com 2 nd and 4 th Sem
Students under CBCS Pattern.
In this post, we include questions asked from 2005 to 2019 exam. Also solved practical problems of Jain and Narang books is included in this post.
Thanks for visiting our blog regularly.

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

 

                                                               

 

 Applications were received for 15000 shares and allotment was made as follows:

(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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