Question

DF Ltd. invited applications for issuing 50,000 shares of ₹ 10 each at a premium of ₹ 2 per share. The amount was payable as follows:
On Application : ₹ 3 per share (including premium ₹ 1)
On Allotment : ₹ 3 per share (including premium ₹ 1)
On First call : ₹ 3 per share
On Second and Final Call: Balance amount
Application for 70,000 shares was received. Allotment was made on the following basis.
Applications for 5,000 shares – Full
Applications for 50,000 shares – 90%
Balance of the applications was rejected. ₹ 1,11,000 were received on account of allotment. The amount of allotment due from the shareholders to whom shares were allotted on pro-rata basis was fully received. A few shareholders to whom shares were allotted in full, failed to pay the allotment money. ₹ 1,20,000 were received on the first call. Directors decided to forfeit those shares on which allotment and call money were due. Half of the forfeited shares were re-issued @ ₹ 8 per share fully paid up. Final call was not made.

Pass the necessary journal entries for the above transactions in the book of DF Ltd.

Answer 1

Date	Particulars		L.F.	Dr. Amount (₹)	Cr. Amount (₹)
	Bank A/c (3 × 70,000)	Dr.		2,10,000
	To Share Application A/c				2,10,000
	(Being application money received on 70,000 shares)
	Share Application A/c	Dr.		2,10,000
	To Share Capital A/c (2 × 50,000)				1,00,000
	To Securities Premium Reserve A/c (1 × 50,000)				50,000
	To Share Allotment A/c (3 × 5,000)				15,000
	To Bank A/c (3 × 15,000)				45,000
	(Being application money transferred to share capital and adjusted)
	Share Allotment A/c (3 × 50,000)	Dr.		1,50,000
	To Share Capital A/c (2 × 50,000)				1,00,000
	To Securities Premium Reserve A/c (1 × 50,000)				50,000
	(Being allotment due on 50,000 shares)
	Bank A/c	Dr.		1,11,000
	Calls in Arrears A/c (3 × 8,000)	Dr.		24,000
	To Share Allotment A/c				1,35,000
	(Being allotment money received with the exception of 8,000 shares)
	Share First Call A/c (3 × 50,000)	Dr.		1,50,000
	To Share Capital A/c (3 × 50,000)				1,50,000
	(Being first call due on 50,000 shares)
	Bank A/c	Dr.		1,20,000
	Calls in Arrears A/c (3 × 10,000)	Dr.		30,000
	To Share First Call A/c				1,50,000
	(Being allotment money received with the exception of 8,000 shares)
	Share Capital A/c (7 × 8,000)	Dr.		56,000
	Securities Premium Reserve A/c (1 × 8,000)	Dr.		8,000
	To Forfeited Shares A/c (2 × 8,000)				16,000
	To Calls in Arrears A/c (24,000 + 24,000)				48,000
	(Being 8,000 shares for non-payment of allotment and first call and 2,000 shares for non-payment of first call forfeited)
	Bank A/c (8 × 4,000)	Dr.		32,000
	Forfeited Shares A/c (2 × 4,000)	Dr.		8,000
	To Share Capital A/c				40,000
	(Being 50% of forfeited shares reissued as fully paid-up)

Note: There is a misprinting error in the question regarding share allotment money was due only from 5,000 shareholders who were allotted shares in full because it was unpaid on 8,000 shares.

Pro-Rate Computation Table

Categories	Shares Applied	Shares Allotted	Application Money Received  @ ₹ 3 (₹)	Application Money transferred to Share Capital & SPR @ ₹ 3 (₹)	Excess on Application (₹)	Allotment @ ₹ 3 Against		First Call @ @ ₹ 3	Refund (₹)
						Face Vaue @ ₹ 2	SPR @ ₹ 1
A	5,000	5,000	15,000	15,000	Nil	-	-	-	-
B	50,000	45,000	1,50,000	1,35,000	15,000	15,000	-	-	-
C	15,000	Nil	45,000	Nil	-	-	-	-	45,000
	70,000	50,000	2,10,000	1,50,000	15,000	15,000	-	-	45,000