Question

Altima Ltd. invited applications for issuing 2,00,000 equity shares of ₹ 10 each at a premium of ₹ 4 per share. The amount was payable as follows:

On application and allotment – ₹ 7 per share (including premium ₹ 1)

On first and final call – Balance

Applications were received for 2,40,000 shares. Applications for 30,000 shares were rejected, and pro-rata allotment was made to the remaining applicants. Excess money received on the application and allotment was returned. Manvi, who was allotted 4,000 shares, failed to pay the first and final call money. Her shares were forfeited. All the forfeited shares were reissued at 4 per share, fully paid-up.

Pass the necessary journal entries in the books of Altima Ltd.

Answer 1

In the Books of Altima Limited Journal
Date	Particulars	L. F.	Debit (₹)	Credit (₹)
i.	Bank A/с   ...Dr.		16,80,000	−
	To Equity Share Application and Allotment A/c		−	16,80,000
	(Being application and allotment money received for 2,40,000 shares)
ii.	Equity Share Application and Allotment A/c   ...Dr.		16,80,000	−
	To Equity Share Capital A/c		−	12,00,000
	To Securities Premium A/с		−	2,00,000
	To Bank A/c		−	2,80,000
	(Being shared application and allotment money adjusted)
iii.	Equity Share First and Final Call А/с   ...Dr.		14,00,000	−
	To Equity Share Capital A/c		−	8,00,00
	To Securities Premium A/c		−	6,00,000
	(Being the amount due on the first and final call)
iv.	Bank A/c   ...Dr.		13,72,000	−
	Calls-in-Arrears A/c   ...Dr.		28,000	−
	To Equity Share First and Final Call A/c		−	14,00,000
	(Being first and final call money received except on 4,000 shares)
v.	Share Capital A/c   ...Dr.		40,000	−
	Securities Premium A/c   ...Dr.		12,000	−
	To Calls-in-Arrears A/c		−	28,000
	To Share Forfeiture A/c		−	24,000
	(Being forfeiture of 4,000 shares for non-payment of the first and final call)
vi.	Bank A/c   ...Dr.		16,000	−
	Share Forfeiture A/с   ...Dr.		24,000	−
	To Equity Share Capital A/c		−	40,000
	(Being all 4,000 shares reissued at ₹ 4 per share fully paid-up)