Question

NY Ltd. invited applications for issuing 90,000 equity shares of Rs 10 each at a premium of `5 per share. The amount was payable as follows:
On applications and allotment - Rs 10 per share (including premium)
On first and final call - the balance amount
Applications for 2,70,000 shares were received. Applications for 90,000 shares were rejected and money refunded. Shares were allotted on pro-rata basis to the remaining applicants. The first and final call was made. The amount was duly received except on 1.800 shares applied by Govind. His shares were forfeited. The forfeited shares were re-issued at Rs  8 per share fully paid-up.
Pass necessary journal entries for the above transactions in the books of X Ltd.

Answer 1

Journal Entries In the books of NY Ltd.
Date	Particulars	L.F.	Debit Rs	Credit Rs
	Bank A/c                 Dr.     To share application and allotment A/c (Being share application and allotment received on 2,70,000 of Rs 10 each including the discount of Rs 5 each )		27,00,00	27,00,000
	Share application and allotment A/c      Dr.    To Share capital A/c    To Securities Premium A/c    To Bank A/c    To Share First and Final Call A/c (Being share application of 90,000 shares transferred to share capital, share application and allotment on 90,000 shares refunded and rest is adjusted on share first and final call)		27,00,000	4,50,000 4,50,000 9,00,000 9,00,000
	Share First and Final Call A/c                Dr.     To Share capital A/c (Being share first and final call due on 90,000 shares of Rs 5 each)		4,50,000	4,50,000

 

Computation Table
Category	Share Applied	Share Allotted	Money received on Application and Allotment @ Rs 10 each including discount of Rs 5 each	Money transfers to share capital @Rs  5 each	Money transfer to securities premium@ Rs 5 each	Excess Application and Allotment money	Share first and final call due @Rs 5 each	Money Refunded
I	90,000	Nil	9,00,000					9,00,000
II	1,80,000	90,000	18,00,000	4,50,000	4,50,000	9,00,000	4,50,000
	2,70,000	90,000	27,00,000	4,50,000	4,50,000	9,00,000	4,50,000	9,00,000

Working Note:

Those who applied for 1,80,000 shares, allotted = 90,000 Shares

Those who applied for 600 shares, allotted = `90000 xx 1800/180000`= 900 shares

Share Application and Allotment received on 1,800 shares of Rs 10 each (including discount of Rs 5 each) = Rs 18,000

Shares Allotted (900 ×10) =Rs 9,

Excess Application and Allotment money received = Rs 9,000

Share First and Final Call due on 900 shares of its Rs 5 each = Rs 4,500

Excess Application and Allotment money received = Rs 9,000

Now, he has already paid an amount of Its Rs 9,000 in excess at the time of application and allotment which is more than the amount due from him at the time of share final call. Thus, forfeiture is not possible in this case.