Question

Kalyan Company offered 10,000 shares of Rs. 10 each payable as Rs. 3 on application, Rs. 2.50 on allotment, Rs. 2.50 on first call and Rs. 2 on the final call. The public applied for 15,200 shares. The shares were allotted on a pro-rata basis to the applicants of 15,000 shares. All shareholders paid the allotment money excepting one shareholder who was allotted 20 shares. These shares were forfeited. The first call was made thereafter. The forfeited shares were re-issued at Rs. 9 per share, Rs. 8 paid up. The final call was not made.

Pass necessary journal entries in the books of Kalyan Company.

Hint:

Pro-rata ratio 10,000:15,000 = 2:3; excess application money adjusted against allotment; unpaid amount is forfeited.

Answer 1

Note: allotment is made pro-rata only to the applicants of 15,000 shares, so applications for the remaining 200 shares are treated as rejected and their money refunded.
Step 1: Work the numbers backward from the pro-rata ratio, as a sanity check:
Allotment ratio = 10,000 allotted ÷ 15,000 applied (excluding the 200 rejected) = 2:3, so any applicant of 3 shares got 2 allotted — the defaulting holder who got 20 shares allotted must have applied for 20 × 3/2 = 30 shares, which matches the forfeiture calculation exactly.

Step 2: Recompute the excess-application adjustment per share instead of in bulk:
Every applicant effectively ‘overpaid’ application money by Rs. 3 × (3−2) = Rs. 3 for every 2 shares finally allotted (since they paid for 3 but received only 2) — over 10,000 allotted shares this is 10,000 × (3/2) × 3 − 10,000×3 = 45,000−30,000 = Rs. 15,000 excess, matching Step 1's bulk calculation and confirming the adjustment figure.

Step 3: Recompute forfeiture using called-up minus received, rather than allotment-minus-adjustment:
Called up per forfeited share = Application (3) + Allotment (2.50) = Rs. 5.50; for 20 shares = Rs. 110. Amount this holder actually paid in = his original Rs. 90 application money (30 shares × 3), none of which was ever refunded since it was fully absorbed into dues — so unpaid = 110 − 90 = Rs. 20, confirming the earlier figure by a different route.

Step 4: Re-verify the reissue premium using face value logic:
The share's face value is Rs. 10, of which only Rs. 8 (application + allotment + first call) is treated as called/paid at reissue; receiving Rs. 9 against an Rs. 8 called-up value is Re. 1 more than called, which by Companies Act rules on reissue at a price exceeding the called-up amount goes to Securities Premium, not to Share Capital.

Final Answer:
Cross-checking every figure independently confirms: Rs. 110 called-up and Rs. 90 received on the 20 forfeited shares (Rs. 20 unpaid), a first call of Rs. 24,950 on the remaining 9,980 shares, and a reissue realising Rs. 180 (Rs. 160 to Capital, Rs. 20 to Securities Premium) with the full \[ \boxed{Rs.\ 90} \] forfeiture balance moved to Capital Reserve.