P Limited issued - 6,00,000 equity shares of 10 each at a premium of 2 per share, payable as 3 on application, 5 on allotment (including premium)…
CA Foundation · Accounting · PYQS · September 2024
P Limited issued - 6,00,000 equity shares of 10 each at a premium of 2 per share, payable as 3 on application, 5 on allotment (including premium) and the balance in two calls of equal amount. Applications were received for 8,00,000 shares and pro-rata allotment was made to all the applicants. The excess application money was adjusted towards allotment. Harish to whom1600 shares were allotted failed to pay both calls and his shares were subsequently forfeited after second call. You are required to pass journal entries in the books of P Limited and prepare bank account.
Suggested Answer and Working Notes:
Journal Entries in the books of P Limited Particulars Debit (₹) Credit (₹) Bank A/c Dr. 24,00,000 To Equity Share Application A/c 24,00,000 (Being application money received for8,00,000 shares @3 per share) Equity Share Application A/c Dr. 24,00,000 To Equity Share Allotment A/c 6,00,000 To Equity Share Capital A/c 18,00,000 (Being excess application money adjusted against allotment and application money transferred to share capital on 6,00,000 shares at 3 each) Equity Share Allotment A/c Dr. 30,00,000 To Equity Share Capital A/c 18,00,000 To Securities Premium A/c 12,00,000 (Being allotment money due,5 per share including 3towards share capital and 2towards premium) Bank A/c Dr. 24,00,000 To Equity Share Allotment A/c 24,00,000 (Being allotment money received after adjusting excess application money) Equity Share First Call A/c Dr. 12,00,000 To Equity Share Capital A/c 12,00,000 (Being first call money due @2 per share) Bank A/c Dr. 11,96,800 Calls in arrear Dr. 3,200 To Equity Share First Call A/c 12,00,000 (Being first call money received, except on 1600 shares) Or Bank A/c Dr. 11,96,800 To Equity Share First Call A/c 11,96,800 (Being first call money received, except on 1600 shares) Equity Share Final Call A/c Dr. 12,00,000 To Equity Share Capital A/c 12,00,000 (Being final call money due @2 per share) Bank A/c Dr. 11,96,800 Calls in arrear Dr. 3,200 To Equity Share Final Call A/c 12,00,000 (Being final call money received, except on 1600 shares) Or Bank A/c Dr. 11,96,800 To Equity Share Final Call A/c 11,96,800 (Being final call money received, except on 1600 shares) Equity Share Capital A/c Dr. 16,000 To Call in Arrear 6,400 To Share Forfeiture A/c 9,600 (Being forfeiture of1600 shares of Harish for non-payment of calls money) Or Equity Share Capital A/c Dr. 16,000 To Equity Share First Call A/c 3,200 To Equity Share Final Call A/c 3,200 To Share Forfeiture A/c 9,600 (Being forfeiture of1600 shares of Harish for non-payment of calls money) Bank Account Particulars Debit (₹) Credit (₹) To Equity Share Application A/c 24,00,000 By Balance c/d 71,93,600 To Equity Share Allotment A/c 24,00,000 To Equity Share First Call A/c 11,96,800 To Equity Share Second Call A/c 11,96,800 Total 71,93,600 71,93,600
Topics: Issue, Forfeiture and Re-issue of Shares
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