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Alfa Limited Invited Applications for 4,00,000 of Its Equity Shares of Rs 10 Each on the Following Terms : - Accountancy

Numerical

Alfa Limited invited applications for 4,00,000 of its equity shares of Rs 10 each on the following terms :

Payable on application

Rs 5 per share

Payable on allotment

Rs 3 per share

Payable on first and final call

Rs 2 per share

Applications for 5,00,000 shares were received. It was decided :

(a) to refuse allotment to the applicants for 20,000 shares;

(b) to allot in full to applicants for 80,000 shares;

(c) to allot the balance of the available shares’ pro-rata among the other applicants; and

(d) to utilise excess application money in part as payment of allotment money.

One applicant, whom shares had been allotted on pro-rata basis, did not pay the amount due on allotment and on the call, and his 400 shares were forfeited. The shares were reissued @ Rs 9 per share. Show the journal and prepare Cash book to record the above.

 

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Solution

In the books of Alfa Limited

Journal

 

Date

Particulars

L.F.

Debit

Amount

Rs

Credit

Amount

Rs

 

Share Application A/c

Dr.

 

24,00,000

 

 

 

To Share Capital A/c

 

 

20,00,000

 

 

To Share Allotment A/c

 

 

4,00,000

 

(Share Application money adjusted)

 

 

 

 

 

Share Allotment A/c

Dr.

 

12,00,000

 

 

 

To Share Capital A/c

 

 

12,00,000

 

(Share Allotment money due)

 

 

 

 

 

Share First and Final Call A/c

Dr.

 

8,00,000

 

 

 

To Share Capital A/c

 

 

8,00,000

 

(Share First and Final Call due)

 

 

 

 

Working Note:

1. Number of shares apllied by applicant 

= `"Total number of applied shares"/"Total number of alloted shares"xx"No. of shares alloted"`

`"4,00,000"/"3,20,00"xx"400 =500 shares"`

2. Call in arrears by applicant on allotment

Money received on Application

(500×5)

=

2,500

Less: Amount adjusted on Application

(400×5)

=

2,000

Amount adjusted on Allotment

 

 

50

3.

Money due on Allotment

(400×3)

1,200

 

Less: Money adjusted

 

500

 

Balance due on Allotment

 

700

Date

Particulars

L.F.

Debit

Amount

Rs

Credit

Amount

Rs

 

Share Capital A/c

Dr.

 

4,000

 

 

 

To Share Allotment A/c

 

 

700

 

 

To Share First & Final Call A/c

 

 

800

 

 

To Share Forfeiture A/c

 

 

2,500

 

(400 shares forfeited)

 

 

 

 

 

Share Forfeiture A/c

Dr.

 

400

 

 

 

To Share Capital A/c

 

 

400

 

(Share reissued and loss on issue charged from Share Forfeiture

Account)

 

 

 

 

Share Forfeiture A/c

Dr.

 

2,100

 

 

 

To Capital Reserve A/c

 

 

2,100

 

(Share Forfeiture Account transferred to Capital Reserve Account)

 

 

 

 

Cash Book (Bank Column)

Dr.

 

 

 

 

 

 

Cr.

 

Date

Particulars

J.F.

Amount

Rs

Date

Particulars

J.F.

Amount

Rs

 

Share Application

 

25,00,000

 

Share Application

 

1,00,000

 

Share Allotment

 

7,99,300

 

Balance c/d

 

40,02,100

 

Share First and Final Call

 

7,99,200

 

 

 

 

 

Share Capital

 

3,600

 

 

 

 

 

 

 

41,02,100

 

 

 

41,02,100

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APPEARS IN

NCERT Class 12 Accountancy - Company Accounts and Analysis of Financial Statements
Chapter 1 Accounting for Share Capital
Numerical Questions | Q 19 | Page 69
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