Question

Jay Ltd. issued a prospectus inviting applications for 1,00,000 shares of ₹10 each. These shares were issued at par on the following terms:
On application ₹2.50, on allotment ₹2.50, on first call ₹3 and on final call the balance.
Applications were received for 1,35,000 shares. Allotments were made on the following basis:

1. To applicants for 25,000 shares - in full;
2. To applicants for 60,000 shares - 45,000 shares
3. To applicants for 50,000 shares - 30,000 shares

All excess amount paid on application is to be adjusted against amount due on allotment.
The shares were fully called and paid-up except the amount of allotment, first and final call not paid by those who applied for 4,000 shares of the group applying for 50,000 shares.
All the shares on which calls were not paid were forfeited by the Board of Directors. 1,800 forfeited shares were re-issued as fully paid on receipt of ₹9 per share.
Prepare Cash Book and Journal entries to record the above.

Answer 1

Cash Book
Date	Particulars	Amount (₹)	Date	Particulars	Amount (₹)
	To Share Application A/c	3,37,500
	To Share Allotment A/c	1,60,500
	To Share First Call A/c	2,91,000
	To Share Final Call A/c	2,91,000
	To Bank A/c (Reissue of forfeited shares)	16,200
	To Balance c/d	10,02,200
		10,96,200			10,96,200

 

Journal entries In the books of Jay Ltd.
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Bank A/c     ...Dr.		3,37,500
	To Share Application A/c			3,37,500
	(Being application money received on 1,35,000 shares @ ₹2.50)
2.	Share Application A/c     ...Dr.		3,37,500
	To Share Capital A/c			2,50,000
	To Share Allotment A/c			87,500
	(Transfer of application money and excess adjusted to allotment)
3.	Share Allotment A/c     ...Dr.		2,50,000
	To Share Capital A/c			2,50,000
	(Allotment money due on 1,00,000 shares @ ₹2.50 each)
4.	Bank A/c     ...Dr.		1,60,500
	Calls in Arrears A/c     ...Dr.		89,500
	To Share Allotment A/c			2,50,000
	(Money received on allotment including adjustments)
5.	Share First Call A/c     ...Dr.		3,00,000
	To Share Capital A/c			3,00,000
	(First call money due)
6.	Bank A/c     ...Dr.		2,91,000
	Calls in Arrears A/c     ...Dr.		9,000
	To Share First Call A/c			3,00,000
	(First call money received; ₹9,000 unpaid)
7.	Share Final Call A/c     ...Dr.		3,00,000
	To Share Capital A/c			3,00,000
	(Final call money due)
8.	Bank A/c     ...Dr.		2,91,000
	Calls in Arrears A/c     ...Dr.		9,000
	To Share Final Call A/c			3,00,000
	(Final call received except ₹9,000)
9.	Share Capital A/c     ...Dr.		40,000
	To Calls in Arrears A/c			18,000
	To Share Forfeiture A/c			22,000
	(Forfeiture of 4,000 shares for non-payment of allotment, first & final call)
10.	Bank A/c     ...Dr.		16,200
	Share Forfeiture A/c     ...Dr.		5,400
	To Share Capital A/c			21,600
	(Re-issue of 1,800 forfeited shares @ ₹9)
11.	Share Forfeiture A/c     ...Dr.		5,700
	To Capital Reserve A/c			5,700
	(Profit on reissue transferred to Capital Reserve)