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 Applications were received for 58,000 shares. Rajat, the holder of 300 shares, did not pay allotment money, and Usha, the holder of 500 shares, paid her entire share money along with allotment money. Rajat’s shares were forfeited immediately after allotment. First and final call was made afterward and duly received. Pass necessary journal entries for the above transactions. Open ‘Calls-in-arrears’ and ‘Calls-in-advance’ Account, wherever required.

Hint:

While recording forfeiture and reissue of shares, ensure all unpaid amounts are routed through Calls-in-arrears, and any excess received is adjusted via Calls-in-advance.

Answer 1

Journal Entries: \[ \begin{array}{|l|p{8cm}|r|r|} \hline Date & Particulars & Dr (₹) & Cr (₹)
\hline 2023 Mar 31 & Bank A/c & 2,90,000 &
& To Share Application A/c & & 2,90,000
& \textit{(Amount received on 58,000 shares @ ₹ 5 per share)} & &
\hline 2023 Mar 31 & Share Application A/c & 2,90,000 &
& To Share Capital A/c & & 2,90,000
& \textit{(Application money transferred to Share Capital Account)} & &
\hline 2023 Apr 1 & Bank A/c & 58,200 &
& Calls-in-advance A/c & 500 &
& To Share Allotment A/c & & 58,700
& \textit{(Allotment money received, including calls in advance for 500 shares)} & &
\hline 2023 Apr 2 & Calls-in-arrears A/c & 300 &
& To Share Allotment A/c & & 300
& \textit{(Allotment money not received from Rajat on 300 shares)} & &
\hline 2023 Apr 3 & Share Capital A/c (300 \times ₹ 6) & 1,800 &
& To Calls-in-arrears A/c (300 \times ₹ 1) & & 300
& To Share Forfeiture A/c & & 1,500
& \textit{(Forfeiture of 300 shares for non-payment of allotment money)} & &
\hline 2023 Apr 30 & Bank A/c & 2,88,000 &
& To Share First and Final Call A/c & & 2,88,000
& \textit{(First and final call money received on 57,200 shares)} & &
\hline \end{array} \] Calls-in-Arrears Account: \[ \begin{array}{|l|r|} \hline Particulars & Amount (₹)
\hline To Share Allotment A/c (Rajat) & 300
By Share Capital A/c (Forfeiture) & 300
\hline Total & 300
\hline \end{array} \] Calls-in-Advance Account: \[ \begin{array}{|l|r|} \hline Particulars & Amount (₹)
\hline To Share Allotment A/c (Usha) & 500
\hline Total & 500
\hline \end{array} \]