Question

Space Ventures Limited was registered with an authorised capital of ₹ 20,00,000 divided into 2,00,000 shares of ₹ 10 each. The company offered 80,000 shares for public subscription payable ₹ 4 on application and ₹ 7 on allotment (including ₹ 1 premium). Public had applied for 1,10,000 shares and pro-rata allotment was made in the ratio of 5 : 4. Remaining applications were rejected. Mukta, holding 6,000 shares failed to pay allotment money. Her shares were being forfeited and later re-issued 4,000 shares at a discount of ₹ 2 per share. Pass necessary entries in the books of Space Ventures Ltd.

Answer 1

Journal Entries
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
I.	Bank A/c    ...Dr.		4,40,000	-
	To Share Application A/c		-	4,40,000
	(Being application amount received for 1,10,000 shares)
II.	Share Application A/c   ...Dr.		4,40,000	-
	To Share Capital A/c		-	3,20,000
	To Share Allotment A/c		-	80,000
	To Bank A/c		-	40,000
	(Being application money adjusted and surplus money refunded)
III.	Share Allotment A/c   ...Dr.		5,60,000	-
	To Share Capital A/c		-	4,80,000
	To Securities Premium A/c		-	80,000
	(Being allotment amount due)
IV.	Bank A/c   ...Dr.		4,44,000	-
	Calls in Arrears A/c		36,000	-
	To Share Allotment A/c		-	4,80,000
	(Being allotment money received and unpaid amount transferred to Call in arrears)
V.	Share Capital A/c   ...Dr.		60,000	-
	Securities Premium A/c   ...Dr.		6,000	-
	To Share Forfeited A/c		-	30,000
	To Calls in Arrears A/c		-	36,000
	(Being shares forfeited)
VI.	Bank A/c   ...Dr.		32,000	-
	Share Forfeited A/c   ...Dr.		8,000	-
	To Share Capital A/c		-	40,000
	(Being shares reissued)
VII.	Share Forfeited A/c   ...Dr.		12,000	-
	To Capital Reserve A/c		-	12,000
	(Being gain on reissue transferred to Capital Reserve)