Question

A company issued for public subscription 60,000 equity shares of ₹10 each at a premium of ₹4 per share, payable as under: ₹4 on Application; ₹5 on Allotment (including premium), ₹2.50 on First Call and ₹2.50 on Final Call.
Applications were received for 75,000 equity shares. The shares were allotted pro-rata to the applicants for 70,000 shares, the remaining applications being rejected. Money over-paid on applications was utilised towards sums due on allotment.
A, to whom 1,200 shares were allotted failed to pay allotment and calls money and B, to whom 1,800 shares were allotted failed to pay two calls. These shares were subsequently forfeited after the final call was made. All the forfeited shares were sold to Rajesh as fully paid-up at ₹11 per share.
Prepare Cash Book and journal entries required to record the above transactions.

Answer 1

Dr.	Cash Book		Cr.
Particulars	Amt. (₹)	Particulars	Amt. (₹)
To Share Application A/c	3,00,000	By Refund (5,000 shares)	20,000
To Share Allotment A/c	2,54,800
To Share First Call A/c	1,47,000
To Share Final Call A/c	1,38,000
To Share Reissue A/c	33,000
To Balance c/d	8,52,800	By Balance c/d	8,52,800
	13,72,800		13,72,800

 

Journal entries
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Bank A/c     ...Dr.		3,00,000
	To Share Application A/c			3,00,000
	(Application money received on 75,000 shares)
2.	Share Application A/c     ...Dr.		3,00,000
	To Share Capital A/c			2,40,000
	To Share Allotment A/c			60,000
	(Application money adjusted to capital and allotment; 5,000 shares rejected)
3.	Share Allotment A/c     ...Dr.		3,00,000
	To Share Capital A/c			60,000
	To Securities Premium A/c			2,40,000
	(Allotment due including premium)
4.	Bank A/c     ...Dr.		2,54,800
	Calls in Arrears A/c     ...Dr.		5,200
	To Share Allotment A/c			3,00,000
	(Allotment received; A did not pay full)
5.	Share First Call A/c     ...Dr.		1,50,000
	To Share Capital A/c			1,50,000
	(First call due)
6.	Bank A/c     ...Dr.		1,47,000
	Calls in Arrears A/c     ...Dr.		3,000
	To Share First Call A/c			1,50,000
	(First call money received)
7.	Share Final Call A/c     ...Dr.		1,50,000
	To Share Capital A/c			1,50,000
	(Final call due)
8.	Bank A/c     ...Dr.		1,38,000
	Calls in Arrears A/c     ...Dr.		12,000
	To Share Final Call A/c			1,50,000
	(Final call received)
9.	Share Capital A/c     ...Dr.		30,000
	Securities Premium A/c     ...Dr.		4,800
	To Share Forfeiture A/c			19,200
	To Calls in Arrears A/c			15,600
	(Forfeiture of 3,000 shares for non-payment)
10.	Bank A/c     ...Dr.		33,000
	To Share Capital A/c			30,000
	To Securities Premium A/c			3,000
	(Reissue of 3,000 shares @ ₹11 each)
11.	Share Forfeiture A/c     ...Dr.		14,600
	To Capital Reserve A/c			14,600
	(Profit on reissue transferred to capital reserve)