Question

Ashish Ltd. Invited applications for issuing 75,000 Equity Shares of Rs 10 each at a discount of 10%. The amount was payable as follows:

On Application Rs 2 per share.

On Allotment Rs 2 per share

On First and Final Call − Balance

Applications for 1,50,000 shares were received. Applications for 25,000 shares were rejected and the application money of these applicants was refunded. Shares were allotted on pro-rata basis to the remaining applicants. Excess money received with applications was adjusted towards sums due on allotment. Suman who had applied for 1250 shares failed to pay allotment and first and final call money. Dev did not pay the first and final call on his 100 shares. All these share were forfeited and later on 1000 of these share were re-issued at Rs 17 per shares fully paid up. The re-issued shares included all the shares of Suman.

Pass necessary Journal Entries for the above transactions in the books of Ashish Ltd.

Answer 1

Ashish Ltd.                                          Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	Bank A/c	Dr.		3,00,000
	To Share Application A/c				3,00,000
	(Application money received on 1,50,000 shares of Rs 2 each)
	Share Application A/c	Dr.		3,00,000
	To Share Capital A/c				1,50,000
	To Share Allotment A/c				1,00,000
	To Bank A/c				50,000
	(Application money adjusted)
	Share Allotment A/c	Dr.		2,25,000
	Share Discount A/c	Dr.		75,000
	To Share Capital A/c				3,00,000
	(Allotment money due)
	Bank A/c	Dr.		1,23,750
	To Share Allotment A/c				1,23,750
	(Allotment received  i.e. 1,50,000 – 1,00,000 – 1,250)
	Share First and Final Call A/c	Dr.		3,00,000
	To Share Capital A/c				3,00,000
	(Amount on first and final call due)
	Bank A/c	Dr.		2,93,000
	To Share First and Final Call A/c				2,93,000
	(Amount on First and Final Call due)
	Share Capital A/c (1,750 × 10)	Dr.		17,500
	To Share Discount A/c				1,750
	To Share Forfeiture A/c				7,500
	To Share Allotment A/c				1,250
	To Share First and Call  A/c				7,000
	(Share Forfeited)
	Bank A/c (1,000 × 17)	Dr.		17,000
	To Share Capital A/c				10,000
	To Securities Capital A/c				7,000
	(Reissue of forfeited shares)
	Share Forfeiture A/c			3,750
	To Capital Reserve A/c				3,750
	(Profit on reissue transferred to Capital Reserve)