Question

Shaktimaan Ltd. invited applications for issuing 1,00,000 Shares of ₹ 10 each at a premium of ₹ 2 per share. The amount was payable as ₹ 4 on application (including premium); ₹ 5 on Allotment and balance on call. Applications were received shares for 1,80,000 of which Applications for 30,000 shares were rejected and remaining applicants were allotted on pro-rata basis. Manthan, holding 5,000 shares failed to pay call money and his shares were forfeited. Out of these 2,000 shares were re-issued at premium of ₹ 3 per share. Prepare Cash Book and pass necessary entries.

Answer 1

Journal Entries in the Books of Shaktimaan Ltd.
Date	Particulars	L.F	Debit (₹)	Credit (₹)
i)	Share Application A/c    ...Dr.		6,00,000
	To Share Capital A/c			2,00,000
	To Securities Premium A/c			2,00,000
	To Share Allotment A/c			2,00,000
	(Being Application money utilised)
ii)	Share Allotment A/c    ...Dr.		5,00,000
	To Share Capital A/c			5,00,000
	(Being allotment due with premium)
iii)	Share First and Final Call A/c    ...Dr.		3,00,000
	To Share Capital A/c			3,00,000
	(Being call money due)
iv)	Calls in Arrears A/c    ...Dr.		15,000
	To Share First and Final Call A/c			15,000
v)	Share Capital A/c     ...Dr.		50,000
	To Share Forfeited A/c			35,000
	To Calls in Arrears A/c			15,000
	(Being Simba’s shares forfeited)
vi)	Share Forfeited A/c    ...Dr.		14,000
	To Capital Reserve A/c			14,000
	(Being gain on re-issue transferred to Capital Reserve)

 

Cash Book (with Bank Column only)
Date	Particulars	LF	Amount (₹)	Date	Particulars	LF	Amount (₹)
i)	To Share Application A/c		7,20,000	ii)	By Share Application A/c		1,20,000
ii)	To Share Allotment A/c		3,00,000
iii)	To Share First and Final Call A/c		2,85,000
v)	To Share Capital A/c		20,000	vi)	By Balance c/d		12,11,000
	To Securities Premium A/c		6,000
			13,31,000				13,31,000