Amisha Ltd inviting application for 40,000 shares of Rs 100 each at a premium of Rs 20 per share payable; on application Rs 40 ; on allotment Rs 40 (Including premium): on first call Rs 25 and Second and final call Rs 15. Application were received for 50,000 shares and allotment was made on pro-rata basis. Excess money on application was adjusted on sums due on allotment. Rohit to whom 600 shares were allotted failed to pay the allotment money and his shares were forfeited after allotment. Ashmita, who applied for 1,000 shares failed to pay the Two calls and his shares were forfeited after the second call. Of the shares forfeited, 1,200 shares were sold to Kapil for Rs 85 per share as fully paid, the whole of Rohit’s shares being included. Record necessary journal entries.
Solution
Books of Amisha Ltd.
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
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Bank A/c |
Dr. |
|
20,00,000 |
|
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|
|
To Share Application A/c |
|
|
20,00,000 |
||||
|
(Share Application money received on 50,000 shares @ 40 per share) |
|
|
|
|||||
|
Share Application A/c |
Dr. |
|
20,00,000 |
|
||||
|
|
To Share Capital A/c |
|
|
16,00,000 |
||||
|
|
To Share Allotment A/c |
|
|
4,00,000 |
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|
(Share Application money adjusted) |
|
|
|
|
||||
|
Share Allotment A/c |
Dr. |
|
16,00,000 |
|
||||
|
|
To Share Capital A/c |
|
|
8,00,000 |
||||
|
|
To Share Premium A/c |
|
|
8,00,000 |
||||
|
(Share Allotment money due including premium) |
|
|
|
|
||||
|
Bank A/c |
Dr. |
|
11,82,000 |
|
||||
|
|
To Share Allotment A/c |
|
|
11,82,000 |
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|
(Share Allotment money received except 600 shares) |
|
|
|
|
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|
Share Capital A/c |
Dr. |
|
36,000 |
|
||||
|
Share premium A/c |
Dr. |
|
12,000 |
|
||||
|
|
To Share Allotment A/c |
|
|
18,000 |
||||
|
|
To Share Forfeiture A/c |
|
|
30,000 |
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|
(600 shares forfeited after allotment) |
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|
|
|
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|
Share First Call A/c |
Dr. |
|
9,85,000 |
|
||||
|
|
To Share Capital |
|
|
9,85,000 |
||||
|
(First Call money in due on 39,400 shares) |
|
|
|
|
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|
Bank A/c |
Dr. |
|
9,65,000 |
|
||||
|
|
To Share First Call A/c |
|
|
9,65,000 |
||||
|
(First Call money received except 800 shares) |
|
|
|
|
||||
|
Share Second and Final Call A/c |
Dr. |
|
5,91,000 |
|
||||
|
|
To Share Capital A/c |
|
|
5,91,000 |
||||
|
(Second and Final Call money due on 39,400 shares) |
|
|
|
|
||||
|
Bank A/c |
Dr. |
|
5,79,000 |
|
||||
|
|
To Share Second and Final Call A/c |
|
|
5,79,000 |
||||
|
(Second and Final Call money received except 800 shares) |
|
|
|
|
||||
|
Share Capital A/c |
Dr. |
|
80,000 |
|
||||
|
|
To Share First Call A/c |
|
|
20,000 |
||||
|
|
To Share Second & Final Call A/c |
|
|
12,000 |
||||
|
|
To Share Forfeiture A/c |
|
|
48,000 |
||||
|
(800 share forfeited) |
|
|
|
|
||||
|
Bank A/c |
Dr. |
|
1,02,000 |
|
||||
|
Share Forfeiture A/c |
Dr. |
|
18,000 |
|
||||
|
|
To Share Capital A/c |
|
|
|
1,20,000 |
|||
|
(Forfeited shares reissued 1,200 @ 85 per share) |
|
|
|
|
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|
Share Forfeiture A/c |
Dr. |
|
48,000 |
|
||||
|
|
To Capital Reserve A/c |
|
|
|
48,000 |
|||
|
(Profit on 1,200 reissued shares are transfer to capital reserve account) |
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|
Cash Book (Bank Column)
Dr. |
|
|
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|
|
Cr. |
Date |
Particulars |
J.F. |
Amount Rs |
Date |
Particulars |
J.F. |
Amount Rs |
|
Share Application |
|
20,00,000 |
|
Balance c/d |
|
48,28,000 |
|
Share Allotment |
|
11,82,000 |
|
|
|
|
|
Share First Call |
|
9,65,000 |
|
|
|
|
|
Share Final Call |
|
5,79,000 |
|
|
|
|
|
Share Capital |
|
1,02,000 |
|
|
|
|
|
|
|
48,28,000 |
|
|
|
48,28,000 |
Working note:
1. Number of shares applied by rohit
=`"Total number of apllied shares"/"Total number of alloted shares"xx" No. of shares alloted"`
`(50,000)/(40,000) xx 600= 750" shares"`
2. Call in arrears by Rohit on allotment
Money received on Application |
(750×40) |
30,000 |
Less: Amount adjusted on Application |
(600×40) |
24,000 |
Amount adjusted on Allotment |
|
6,000 |
3.
Money due on Allotment |
(600×40) |
24,000 |
Money adjusted |
|
6,000 |
Balance due on Allotment |
|
18,000 |
4. Number of shares alloted to ashmita
`"Total number of apllied shares"/"Total number of alloted shares"xx" No. of shares alloted"`
`(40,000)/(50,000)xx1000=800" shares"`
5. Profit on the forfeiture of 600 share of Rohit = Rs 30,000
Profit on the forfeiture of 600 share of Ashmita = Rs 36,000 `(48,000xx(600)/800=36,000)`
Profit on forfeiture of 1200 shares (30,000 + 36,000) |
= |
66,000 |
|
Less: Loss on reissue of shares |
= |
18,000 |
|
Transfer to Capital Reserve |
= |
48,000 |
6. Balance in Share Forfeiture Account (48,000 – 36,000) = Rs 12,000