Question

Modern Ltd. issued a prospectus inviting applications for 2,00,000 shares of ₹10 each at a premium of ₹6 per share, payable as follows:

On Application	₹5 (including premium ₹2)
On Allotment	₹5 (including premium ₹2)
On Ist Call	₹3 (including premium ₹1)
On IInd & Final Call	₹3 (including premium ₹1)

Applications were received for 2,60,000 shares and pro-rata allotment was made to the applicants for 2,50,000 shares. Excess money paid on applications for these shares was utilised towards allotment.
A, who applied for 1,000 shares, failed to pay the allotment money and his shares were forfeited after allotment.
B, who applied for 1,500 shares, failed to pay the two calls and his shares were also forfeited.
Of the shares forfeited, 1,800 shares were re-issued as fully paid up for ₹15 per share, the whole of B's share being included. Prepare Cash Book, Journal and Balance Sheet.

Answer 1

Dr.	Cash Book				Cr.
Date	Particulars	Amount (₹)	Date	Particulars	Amount (₹)
	To Share Application A/c	13,00,000		By Share Application A/c	50,000
	To Share Allotment A/c	7,47,000		By Balance c/d	32,12,000
	To Share First Call A/c	5,94,000
	To Share Second Call A/c	5,94,000
	To Share Capital A/c (Reissue)	27,000
	Total	32,62,000		Total	32,65,000

 

Journal Entries
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Bank A/c     ...Dr.		13,00,000
	To Share Application A/c			13,00,000
	(Application money received)
2.	Share Application A/c     ...Dr.		13,00,000
	To Share Capital A/c			10,00,000
	To Share Allotment A/c			2,50,000
	To Bank A/c (Refund)			50,000
	(Application adjusted; excess to allotment; refund on 10,000 shares)
3.	Share Allotment A/c     ...Dr.		10,00,000
	To Share Capital A/c			6,00,000
	To Securities Premium A/c			4,00,000
	(Allotment money due)
4.	Bank A/c     ...Dr.		7,47,000
	Calls in Arrears A/c     ...Dr.		3,000
	To Share Allotment A/c			7,50,000
	(Allotment money received)
5.	Share First Call A/c     ...Dr.		6,00,000
	To Share Capital A/c			4,00,000
	To Securities Premium Reserve A/c			2,00,000
	(First call due @ ₹3 incl. ₹1 premium)
6.	Bank A/c     ...Dr.		5,94,000
	Calls in Arrears A/c     ...Dr.		6,000
	To Share First Call A/c			6,00,000
	(First call received; B’s 1,200 shares unpaid)
7.	Share Second & Final Call A/c     ...Dr.		6,00,000
	To Share Capital A/c			4,00,000
	To Securities Premium Reserve A/c			2,00,000
	(Second call due @ ₹3 incl. ₹1 premium)
8.	Bank A/c     ...Dr.		5,94,000
	Calls in Arrears A/c     ...Dr.		6,000
	To Share Second & Final Call A/c			6,00,000
	(Second call received; B unpaid)
9.	Share Capital A/c     ...Dr.		16,800
	Securities Premium Reserve A/c     ...Dr.		4,000
	To Calls in Arrears A/c			10,200
	To Share Forfeiture A/c			10,600
	(A: 800 shares,unpaid allot; SPR Dr ₹1,600. B: 1,200,two calls unpaid; SPR Dr ₹2,400.)
10.	Bank A/c     ...Dr.		27,000
	To Share Capital A/c			18,000
	To Securities Premium Reserve A/c			9,000
	(Reissue of 1,800 forfeited shares @ ₹15, fully paid)
11.	Share Forfeiture A/c     ...Dr.		9,750
	To Capital Reserve A/c			9,750
	(Profit on reissue transferred)

 

Balance Sheet
Liabilities	Amt (₹)	Assets	Amt (₹)
Share Capital (2,00,000 Equity shares of ₹10 each, fully paid)	20,00,000	Cash at Bank	32,12,000
Securities Premium Reserve	2,03,400
Capital Reserve	9,750
Share Forfeiture A/c (Balance)	850
Total	32,12,000	Total	32,12,000