Question

Sai Ltd. invited applications for issuing 60,000 shares of ₹ 10 each. The amount was payable as follows:
On application – ₹ 5 per share On allotment – ₹ 1 per share On first and final call – Balance

Hint:

When shares are forfeited, the amount paid on those shares is transferred to the forfeited shares account, and any amount not received is transferred to calls in arrears.

Answer 1

Applications were received for 58,000 shares. Rajat, holding 300 shares, failed to pay the allotment money. Usha, holding 500 shares, paid her full share amount including the allotment. Rajat's shares were forfeited post-allotment.
Record the necessary journal entries for these transactions. Journal Entries: \begin{center}\renewcommand{\arraystretch}{1.5}\begin{tabular}{|p{10cm}|r|r|}\hlineParticulars & Dr Amount (₹) & Cr Amount (₹)
\hlineBank A/c (58,000 × ₹ 5) & 2,90,000 & --
To Share Application A/c & -- & 2,90,000
(Being application money received for 58,000 shares) & &
\hlineShare Application A/c & 2,90,000 & --
To Share Capital A/c (58,000 × ₹ 5) & -- & 2,90,000
(Being application money transferred to share capital account) & &
\hlineShare Allotment A/c (58,000 × ₹ 1) & 58,000 & --
To Share Capital A/c & -- & 58,000
(Being allotment money due) & &
\hlineBank A/c (57,700 × ₹ 1 + 500 × ₹ 5) & 58,200 & --
Calls-in-Arrears A/c (300 × ₹ 1) & 300 & --
To Share Allotment A/c & -- & 58,500
To Calls-in-Advance A/c (500 × ₹ 4) & -- & 2,000
(Being allotment money received, including advance from Usha and arrears from Rajat) & &
\hlineShare Capital A/c (300 × ₹ 6) & 1,800 & --
To Share Forfeiture A/c (300 × ₹ 5) & -- & 1,500
To Calls-in-Arrears A/c (300 × ₹ 1) & -- & 300
(Being 300 shares of Rajat forfeited for non-payment of allotment money) & &
\hlineShare First and Final Call A/c (57,700 × ₹ 4) & 2,30,800 & --
To Share Capital A/c & -- & 2,30,800
(Being first and final call due) & &
\hlineBank A/c & 2,30,800 & --
To Share First and Final Call A/c & -- & 2,30,800
(Being first and final call money received) & &
\hlineCalls-in-Advance A/c & 2,000 & --
To Share First and Final Call A/c & -- & 2,000
(Being adjustment of Usha’s advance towards first and final call) & &
\hline\end{tabular}\end{center}