Suggested answers of the class quiz

ParticularsAmount (Rs.)

Amount (Rs.)

1 Bank A/c dr. (90000x2) 180000To share Application A/c (90000x2) 180000

2 Share Application A/c dr. (90000x2) 180000To share Capital A/c (60000x2) 120000

To Bank A/c (18000x2) 36000To Share Allotment A/c (12000x2) 24000

3 Share Allotment A/c dr. (60000x5) 300000To Share Capital A/c dr. (60000x3) 180000

To Securities premium A/c (60000x2) 1200004 Bank A/c dr. 264960

To Share Allotment A/c 264960(300,000-24,000-Calls in arrears 11,040)

5 Share First call A/c dr. (60000x2) 120000To Share Capital A/c (60000x2) 120000

6 Bank A/c dr. 109200To Share First call A/c 109200

(120,000-Calls in arrears (4800+6000))7 T's Shares forfeited

Share capital A/c dr. (2400x7) 16800Securities premium A/c dr. (2400x2) 4800

To Share Allotment A/c 11040To First Call Account A/c 4800To Forfeited shares A/c (2880x2) 5760

8 Share Second call A/c dr. (57600x3) 172800To Share Capital A/c (57600x3) 172800

9 Bank A/c dr. 163800To Share Second Call A/c 163800

(172,800-calls in arrears 9,000)10 M's Shares forfeited

Share capital A/c dr. (3000x10) 30000To Share First Call A/c 6000

To Share Second Call A/c 9000To Forfeited shares A/c [3000(2+3)] 15000

11 T's Shares re-issuedBank A/c dr. (2400x8) 19200Forfeited shares A/c dr. 4800

To share Capital A/c (2400x10) 2400012 M's Shares re-issued

Bank A/c dr. (1500x8) 12000Forfeited shares A/c dr. 3000

To share Capital A/c (1500x10) 15000Combined entry for re-issuance of sharesBank A/c dr. (3900x8) 31200Forfeited shares A/c dr. 7800

To share Capital A/c (3900x10) 3900013 Bal. of foreited shares transferred to CR

Forfeited shares A/c 5460To Capital Reserve A/c 5460

[Total Cr. (5760+15000)-Total Dr. (4800 + 3000) - Closing balance of Forfeited shares A/c for unissued shares (forf. Shares 3000 - credited amt. 15000: unissued shares 1500- (?) = 7500)=5460]

Que.1 From the following information pass necessary journal entries in the books of A limited.

1) Face value per share 10, Premium 2.2) Payable as under:

On Application 2On Allotment 5 (including premium)On First call 2On Second Call 3

3) Applications for 90000 shares received. Applications for 18000 shares were totally rejected and remaining shares were allotted on the basis of pro-rata.

Application for shares AllotmentPro-rata 72000 60000Rejected 18000 ---------

4) T, to whom, 2400 shares were allotted, failed to pay allotment and first call money, and subsequently his share were forfeited.

5) M, who had applied for 3600 shares, failed to pay first call and second call. His shares were forfeited.

6) 3900 shares were re-issued (including all shares of T) to K as fully paid at Rs. 8 per share.

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Working Notes:

Calls in arrears – T

1) Allotment (Allotted shares 2400 x 5 per share) = 12,000

Less: Excess amount of the shares rejected in the pro-rata category

Allotted shares 60000 (5) – Application for shares 72000 (6)

Allotted shares 2400 - ? = 2400x6/5 = applied for 2880 shares

2880-2400 Allotted = rejected share 480 x 2 - Excess Amount (480x2) 960

Net amount of Calls in arrears for allotment, after adjusting for the excess amount 11,040

2) First Call (Allotted shares 2400 x 2 per share) = 4,800

Calls in arrears – M

Applied for 3600 share, shares allotted to M (6-5:3600-?) =3000

1) First Call ( Allotted shares 3000 x 2 per share) = 6,0002) Second Call (Allotted shares 3000 x 3 per share) = 9,000

Calls in arrearsAllotment money First Call money Second call money

T 11,040 4,800 Shares forfeited before second callM Paid the allotment amount 6,000 9,000

Total 11,040 10,800 9,000