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, 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.
Pass the necessary journal entries for the above transactions. Journal Entries: \begin{center} \renewcommand{\arraystretch}{1.5} \begin{tabular}{|p{10cm}|r|r|} \hline Particulars & Dr Amount (₹) & Cr Amount (₹)
\hline Bank A/c (58,000 × ₹ 5) & 2,90,000 & --
To Share Application A/c & -- & 2,90,000
(Being application money received for 58,000 shares) & &
\hline Share 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) & &
\hline Share Allotment A/c (58,000 × ₹ 1) & 58,000 & --
To Share Capital A/c & -- & 58,000
(Being allotment money due) & &
\hline Bank 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) & &
\hline Share 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) & &
\hline Share 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) & &
\hline Bank A/c & 2,30,800 & --
To Share First and Final Call A/c & -- & 2,30,800
(Being first and final call money received) & &
\hline Calls-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}