8.

86 Double Entry Book Keeping-CBSE XIl

It the shares are issued at premium and premium amount is collected

allotment, excess Application Money is first adjusted against Share Capital he Solution:

against Securities remium. and timne

Calulate amount due but not paid by the defaulting shareholder on allotmens thereafte. (i) Noapp
Pro

Amount due on Allotment (Number of Shares Allotted xAllotment Money per share)
Less: Excess Application Money Adjusted on Allotment
fol ows. (ü)
Itmea

(iii)No.o
(Shares Applied - Shares Allotted) x Application Money per Share)
Amount due but not Paid on Allotment*
*Thisamount is credited to Shares Allotment Account at the time of passingentry for forfeiture.
(iv)No.

For exanmple, a company received applications for 18,000 shares against 10,000 llustratic
R10each, offered for subscription. Allotment was not made to applicants for 3,000
the remaining applicantswere allotted shares onpro ratabasis. Amnountpayable and
shares
)sharesS
of AlokInd
3 on application, 4on allotmnent and the balance as and when called. Ram. ewas asfolows: Onappli

shares, did not pay the allotment money and his shares were forfeited. It
is
of 80 holder prorata a

determine unpaid amount on allotment for passing the entry for forfeiture of shares to
The unpaid allotment money is determined as follows:
necessary theamo

(i)
Cal
(ii) Cal
15,000
Shares applied by Ram = x 80 = 120 Shares.
Solutic
10,000
Amount paid as Application Money: 120 x 3= 360. Shares allotted are 80,
Application Money is 120 (i.e., 360 240). Excess Total

Amount payable on allotment: (80 shares x 4) (i) C

320
Less: Excess Application Money adjusted A
120
Allotment Money due but not paid by Ram L
200
Important Notes For Pro rata Allotment
1. In case of pro rata Allotment students should calculate pro rata ratio
(i.e., ratio between the Total Number of
Shares applied and the Total Number of Shares Allotted). This ratio is used to calculate:
(a) Number of shares applied by an applicant when number of shares allotted to him is
given.
(b) Number of shares allotted to an applicant when number of shares applied by
him is given. (ii)
2. In the case of oversubscription, shares are allotted on pro rata basis,
excess
application money is adjusted
towards allotment money. When the shares are allotted at premium (payable on allotment), excess
application
money is first adjusted towards Share Capital and the balance, if any, towards Securities Premium.

Illustration 53.
Jagbani Ltd. offered 80,000 shares for subscription. Applications were received for 1,30,000
shares and pro rata allotment was made to all the applicants. Amrit had applied for 52,000
shares and Karam was allotted 16,000 shares.
On the basis of above information, calculate:
(i) How many applications have been rejected?
(ii) What is the pro rata ratio?
(iii) How many shares were allotted to Amrit?
(iv) How many shares were applied by Karam?
 for Share Capital . 7
Chapter 8 Company Accounts- Accounting
Solution
to all the applicants
(0) No appication was rejected since pro rata allotment is made
(0) Pro rata ratio - No of shares allotted : No. of shares applied
- 80,000: 1,30,000 or 8: 13.
applied for 13shares.
It means that8 shares are allotted to an applicant who has
tue 80,000
(u) No. of shares allotted to Amrit = 1,30,000 x 52,000 or 13
x 52,000 - 32,000 shares.

antsuk x 16,000 = 26,000shares.

1,30, 000 13
-x16,000or
iv) No. of shares applied by Karam = 80,000 8

Illustration 54.
follows:
Alok Industries Ltd. issued 20,000 shares of 10 each payable as
and balance on allotment. Applications were received for 32,500shares and
On application 6 paid
rata allotment was made to the applicants of 25,000 shares. All the shareholders have
pro
Charnesh to whom 4,000 shares were allotted.
the amount due up to allotment except
(i) Calculate amount due but not paid by Charnesh.
(ii) Calculate allotment money received.
Solution:
25,000 -x4,000 =5,000 shares.
Total No. of shares applied by Charnesh = 20,000
by Charnesh:
(i) Calculation of amount due but not paid on allotment 30,000
Application Money received from Charnesh (5,000 x6) 24,000
(4,000 x6)
Less: Application Money due on shares allotted 6,000
Excess Application Money adjusted on allotment 16,000
Allotment Money due on shares (4,000 x4)
tote:ween the od a 6,000
Less: Excess Application Money adjusted on allotment 10,000
Charnesh
imi gien. Allotment amount due but not received fromn

imis given (ii) Calculation of AllotmentMoney received:

ication monej ót: 80,000
Total Allotment Money due (20,000 x 4)
tment), exces
Less: Allotment Money already received
ities Premiun. 30,000
on application stage (5,000 x*6) 50,000
per (i)] 10,000
Less: Allotment amount due but not received from Charnesh [as
receivedftr. 40,000
Allotment Money received
adappliti
Illustration 55 (Partial Allotment of Shares and their Forfeiture and Reissue).
allotted 1,000 shares.
applied for 2,000shares of ? 10each at a premium of ? 2per share. He was
Hari
money of ? 4 per share
After having paid ? 3 per share on application, he did not pay the allotment call of ? 5 per share,
(including premium) and on his subsequent failure to pay the first and final paid-up.
his shares were forfeited. These shares were reissued @8 per share asfully
shares.
Pass Journal entries to record forfeiture and reissue of
 Double Entry Book
Keeping--CBSE XI
Solution: JOURNAL
Date
Particulars LF.
Share Capital A/c ..Dr.
Dr.R)
Securities Premium A/c ..Dr. 10,000
To Forfeited Shares A/c 1,000*
To Shares Allotment AC
To Shares First Call A/c
,000shares forfeited for non-payment of allotment money and first call)
Bank A/c .Dr.
Forfeited Shares A/c ...Dr.
8,000
To Share Capital A/c 2,000
(1,000 forfeited shares reissued as fuly paid-up for ?8 per share)
Forfeited Shares A/c .Dr. 3,000
To Capital Reserve A/c
(Gain on reissue transferred to Capital Reserve) Note:I n

ar
Working Note: Working
Calculation of the amount due but not paid on allotment:
(a) Total No. of shares applied 2,000 1. Num

(D) Totalmoney paidon application (2,000 x3) 76,000 2. Shar

(c) Excess application money (R 6,000 - (1,000x* 3)] 3,000 Less:
(d) Total amount due on allotment (1,000 >x4) 4,000*
(e) Amount due but not paid 4,000 - 3,000) 7,000 Refu
3. Amo
*Out of 4,000, 2,000 is for Share Capital and 2,000 is for Securities Premium. Out of excess applicat.
money of R3,000, 72,000 is adjusted towards allotment as Share Capital and? 1,000 is adjusted towards Securit Illustr
Premium.Therefore, Securities Premium of 1,000 (i.e, 72,000-*1,000) is not received. Hence, Securities Premi Alpha
Account is debited by 1,000.
72 on
Illustration 56. Appli
Gel Ltd. invited applications for 1,00,000 Equity Shares of ?10 each, payable as *3on application,?, applic
on allotment and the balance on first and final call. Applications were received for 3,00,000 shares and who
the shares were allotted on apro rata basis. Mohit, a shareholder, who had applied for 3,000 shares, The fo
did not pay the call money and his shares were forfeited and reissued@t8per share as fully paid-up. and fi
You are required to pass necessary Journal entries. You a
Solution: JOURNAL OF GEL LTD. Solut
Dr.
Date Particulars LF. Dr. ()
Partic
Bank A/c ..Dr. 9,00,000
To Sh
To Equity Shares Application A/c 9,00,00
(Application money received @3 per share on 3,00,000 shares) To Sh

Equity Shares Application A/c ..Dr. 9,00,000 To Sh

To Equity Share Capital A/c (1,00,000 x 3) 3,00,000 To Sh
To Equity Shares Allotment A/c (1,00,000 x R4) 4,00,000 To Se
To Bank A/C 2,00,000
(Application money adjusted and surplus refunded)
Equity Shares Allotment A/c ..Dr. 4,00,000
To Equity Share Capital A/c 4,00,000 Date
(Allotment money due on 1,00,000 shares)
Equity Shares First and Final Call A/c ..Dr. 3,00,000
To Equity Share Capital A/c 3,00,000
(First and final call money due on 1,00,000 shares @t3 per share)
 (hapter 8 (ompany A4Unts AeeRteg tor share (aita B.89
Rark As
to fguty Shares Fit and Fnal Cal AVE
Ft and hnat a oney re elved eet for 160sharesi(WN )
tasty share Capital A/t 0.000 10)
lo forfeted Shares A/e ( 0007)
to fquty Shares First and Final Cali AVe(I,000 )
a000 shares forfeited due to non payment of call money)
Bank A/k (,000 × 8) Dr
Forteited Shares Ae (1,000 x 2) 2.00)
10,00
To fquity Share Capital A
(Reissue of 1,000 shares @8per share as fully paid up)
forteited Shares A/c .Dr, S,000
S,009
To Capltal Reserve A/c
(Gain on reissue transferred to Capltal Reserve) (WN 3)
Note: In the absence of instruction, excess applicatlon money is adjusted against Allotment money and balance exCeS
amount is refunded.
Working Notes:
1,00,000
1. Number of shares allotted to Mohit X3,000 1,000 shares.
3,00,000
2. Shares Application Money received from Mohit (3,000 x 3) 9,000
Less: Adjusted 7,000
Refunded ?2,000

eSedcluoteasrhts 3. Amount transferred to Capital Reserve =7,000 - ? 2,000 = 5,000.

Illustration 57 (Forfeiture of Shares Allotted onPro rata).
Alpha Ltd. issued 10,000shares of 10 each payable as:
72 on application, 3 on allotment, 3 on first call and ? 2 on second and final call.
on applicau Applications were received for 15,000shares. The shares were allotted on a pro rata basis to the
applicants of 12,000 shares. All shareholders paid the allotment money except one shareholder
who was allotted 200shares. These shares were forfeited. The first call was made thereafter.
for30
as hülype. The forfeited shares were reissued @9 per share as 8 paid-up after first call. The second
and final call was not yet made.
Youare required to prepare Cash Book and pass Journal entries.
Solution: the Books of Alpha Ltd.
CASH BOOK (BANK COLUMN ONLY) C.
D
Particulars
o00 Particulars
To Shares Application A/c 30,000 By Shares Application A/c (3,000 x 2) 6,000
To Shares Allotment A/c (WN 2) 25,480 By Balance c/d 80,680
0,00 To Shares First CallAc 29,400
To Share Capital A/c 1,600
40 To Securities Premium A/c 200
86,680 86,680

JOURNAL
000
Date Particulars LE. Dr. () Cr. ()
Shares Application A/c ..Dr. 24,000
To Share Capital A/c 20,000
00
To Shares Allotment A/c 4,000
(Application money adjusted)
 6.30 Double Entry Book
Keeping-CBSE XII
Shares Allotment A/C ..Dr. 30,000 Solution:
To Share Capital A/c
(Allotment money due on 10,000 shares)
Share Capital A/c ..Dr. 1,000
30,00 Date
Pa

Ba
To Shares Allotment A/c
To Forfeited Shares A/c (A
(200 shares forfeited for non-payment of allotment money) (WN ) SF
Shares First Call A/c .Dr. 29,400
To Share Capital A/c
(First callmoney due on 9,800 shares)
29 AM
(A
Forfeited Shares A/c ..Dr. 480 S
To Capital Reserve A/C
(Transfer of gain on reissue to Capital Reserve) (WN 3)
480
(
Working Notes:
I. 10,000 shares were issued to the applicants for 12,000 shares. It means Ratio of allotment =5:6
Ashareholder who was allotted 200 shares had applied for = 6/5 x 200 = 240 shares

Total application money paid by shareholder on 240 shares applied for @2per share 480
Less: Application money on 200 shares allotted transferred to Share Capital 400
Excess Application Money to be adjusted against Shares Allotment
Allotment money due on 200 shares @3per share 60
Less: Excess Application Money to be adjusted against Shares Allotment 80
Allotment money in arrears 520
2. Calculation of allotment money received:
Allotment money due (Gross) 30,000
Less: Excess Application money to be adjusted (2,000 x 2) 4,00
26,000
Less: Allotment money in arrears (WN 1) 520
Amount received on allotment 25,480
3. Shares have been forfeited before the first call. Called-up amount up to allotment is 5 per share. Shares
have been reissued before the second call for?9 as ? 8paid-up. It means 8 is as Share Capital Account
and 1as Securities Premium. Discount has not been allowed on the reissue of forfeited shares. Therefore,
amount forfeited on these shares is a gain and is transferred to Capital Reserve. Working N
Illustration 58(Conprehensive llustration). 1. Calcu
Shagoon Ltd. issued 40,000 Shares of ? 10 each, for 12 each payable as under: (a) T
(b) Te
On application ? 2 per share, on allotment ? 5 per share (including premium), on first call (c) E
72 per share and on second and final call 3 per share. (d) T
Applications were received for 60,000 shares. Allotment was made on pro rata basis to the (e) A
2. CalcL
applicants for 48,00 shares, remaining applications being refused. Money overpaid on (a) T
application was applied towards amount due on allotment. (b) L
Amrit, towhom 1,600 shares were allotted, failed to pay the allotment money and
Barun, to wno
2.000 shares were allotted, failed to pay two calls. These were subsequently forfeited after the 3.
second and final call. 64
Pass Journal entries in the books of Shagoon Ltd. to record the above Acco
transactions incluan, 4. BarL
the bank entries.
amo
 Chapter 8- Company Accounts--Accounting for Share Capital 8.91

Solution: In the Books of Shagoon Ltd.

JOURNAL
Date Particulars LE Dr. () (.)
Bank A/c .Dr. 1,20,000
To Shares Application A/c 1,20,000
(Applcation money received on 60,000 shares)
. Dr Shares Application A/c .Dr. 1,20,000
To Share Capital A/c 80,000
To Bank A/c 24,000
To Shares Allotment Ac 16,000
(Application money adjusted and surplus refunded)
Shares Allotment A/c ..Dr. 2,00,000
oof To Share Capital A/c 1,20,000

alomerl =5:%
A0 shares
2per share
To Securities Premium A/c
(Allotment money due)
BankA/c
To Shares Allotment A/c
.Dr. 1,76,640
80,000

1,76,640
(Allotment money received on 38,400 shares) (WN 2)
Shares First Call A/c .Dr. 80,000
80,000
To Share Capital A/c
(First call money due on 40,000 shares)
Bank A/c ...Dr. 72,800
72,800
To Shares First Call A/c
(First call money received on 36,400 shares @2 per share)
Shares Second and Final Call A/c ..Dr. 1,20,000
1,20,000
To Share Capital A/c
(Second and finalcallmoney due)
Bank A/c .Dr. 1,09,200
To Shares Second and Final Call A/c 1,09,200
(Second and final call money received on 36,400 shares)
Share Capital A/c ..Dr. 36,000
Securities Premium A/c ..Dr. 3,200
To Shares Allotment A/c 7,360
To Shares First Call A/c 7,200
To Shares Second and Final Call A/c 10,800
13,840
tment is Sper shoe To Forfeited Shares A/c
8 is as Share Capital ktr: (1,600 shares forfeited for non-payment of allotment and calls money and
of forfeited shares iat 2,000shares for non-payment of two calls money) (WN 1)
/e. Working Notes: case of Amrit:
1. Calculation of the amount due but not paid on allotment in
by Amrit = 1,600 x 48,000/40,000 = 1,920 shares.
(a) Total number of shares applied 3,840
from Amrit (1,920 x 2)
asunder: (b) Total money received on application 640
2))
premium) onis (c) Excess application money f 3,840 -(1,600 x 8,000
(d) Total amount due on allotment (1,600 x5)
8,000 -640 (WN 1))) 7,360
(e) Amount due but not paid on allotment by Amrit
atabasist 2. Calculation of allotment money received later: 2,00,000
Onpro (a) Total allotment money due (40,000 x?5) 16,000
d.Moner over Money)
(b) Less: (0) Already received (Excess Application(WN 1)
Amrit 7,360 23,360
(ii) Amount due but not paid by 1,76,640
neyandbarunton Allotment money received
adjusted against Share Capital. Securities Premium
torteitd
antet 3 {640 (excess application money received from Amrit) is
not received from Amrit.
lenthh Account is debited by 3,200 (1,600 x?2) being the amountSecurities Premium Account is not debited by
Premium, therefore,
4 Barun has paid the amount of Securities shares.
forfeiture of his
Iransatis in amount of premium on Barun's shares on
8.92 Double Entry Book
Keeping--CBSE XI Working
No

Illustration 59. a
. No
ofsh

Karur Ltd. invited applications for issuing 2,40,000 equity shares of 10each at
{4 per share. The amount was payable as under: premiumo Calculat

On application- 4 per share (including premium 2), 2. A. App

On allotment--4 per share, B.Mon

Applications final cal|76

On firstforand3,00,000 per share
shares were
(including premium ( 2).
received and pro-rata allotment was made to all the C Exce
applicants. Excess application money received on application was adjusted towards sums due D. Allo

on allotment. All made and were duly received except from Rohini, who failed to pay E. Allo
allotment and firstcalls
andwere
final call on 7,500 shares applied by her. These shares were forfeited
Calcula
fully paid-up.
Afterwards,40% of the forfeited shares were re-issued at 11 per share as Amoun
Karur Ltd. Open Calls-in-Arrears an
Tass the necessary Journal entries in the books of
Calls-in-Advance Accounts, wherever necessary. (CBSE 2020 Amoun
Less: L
Solution: In the Books of Karur Ltd.
JOURNAL Transfe
LF. Dr. () Cr.)
Date Particulars
..Dr. 12,00,000 Illustrati
Bank A/C
To Equity Shares Application A/c 12,00,000
(Application Money received on 3,00,000 shares @4 per share) Denspar
Equity Shares Application A/c ..Dr. 12,00,000
To Equity Share Capital A/c (2,40,000 x * 2) 4,80,000 of? 20 pE
To Securities Premium A/c (2,40,000 x* 2) 4,80,000 On
To Equity Shares Allotment A/c (60,000 x 4) 2,40,000
(Application money transferred to share capital, securities premium and On
share allotment)
Equity Shares Allotment A/c ...Dr. 9,60,000 On
To Equity Share Capital A/c 9,60,000
(Allotment money due on 2,40,000 equity shares @ 4 per share) On
Bank A/c ..Dr. 7,02,000 Applicat
Calls-in-Arrears A/c ...Dr. 18,000
To Equity Shares Allotment A/c 7,20,000 a sharehc
(Allotment money received) (WN1 and WN 2) Vishesh,
Equity Shares First and Final Call A/C .Dr. 14,40,000
was mnad
To Equity Share Capital A/c 9,60,000
To Securities Premium A/c 4,80,000 2,000sh
(First call money dueon 2,40,000 shares @6 per share)
BankA/c ..Dr.
final cal
14,04,000
Calls-in-Arrears A/c (6,000 x *6) .Dr. 36,000 Pass the
To Equity Shares First and Final Call A/c 14,40,000
(First and Final call money received)
Share Capital A/c (6,000x 10) .Dr. 60,000 Solutio
Securities Premium A/c (6,000 x?2) .Dr. 12,000
To Calls-in-Arrears A/c 54,000
To Forfeited Shares A/c Date
18000
(6,000 shares forfeited for non-payment of allotment and first and final call)
Bank A/c ...Dr. 26,400
To Equity Share Capital A/c 24,000
To Securities Premium A/c
2,400
(2,400shares reissued for ? 11 per share fully paid)
Forfeited SharesA/c .Dr. 7,200
To Capital Reserve A/c
7,200
(Gain on reissue of forfeited shares transferred to Capital Reserve) (WN 3)
 Chapter 8 Company Accounts--Accounting for Share Capital 8.93
WorkingNotes:

oine 2
No. ofshares allotted to Rohini7,500 x 2,40,000 -6,000shares.
3,00,000
(akculation of the amount due but not recelved on allotment from Rohini:
30,000
Shareh hes `ha A. Application money received on shares appled (7,500 x?4)
B. Money due on shares allotted (6,000 x4) 24,000

c Excess Application money adjusted on allotment (A - B) 6,000

24,000
D. Allotment money due on shares allotted (6,000 x4)
18,000
E. Allotment money due but not received = 24,000 -7 6,000 (C)
2 Calculation of gain on Re-issue to be transferred to Capital Reserve:
18,000
Amount Forfeited ( 30,000 -7 12,000 (Securities Premium)
2,400 7,200
Amount forfeited on Re-issued Shares18,000 x
6,000 Nil
Less: LoSs on re-issue

Transferred to Capital Reserve 7,200

Illustration 60.
Denspar Ltd. invited applications for issuing 2,00,000 equity shares of 10 each at a premium
of 20per share. The amount was payable as follows:
On Application-*2 per share,
..D. On Allotment- 13 per share (including ? 10 premium),
On FirstCall-*7 per share (including 5premium), and
.Dr. On Final Call-*8 per share (including ? 5premium).
Dr. Applications for 1,80,000 shares were received. Shares were allotted to all the applicants. Yogesh,
ashareholder holding 5,000 shares paid his entire share money along with the allotment money.
Dr Vishesh, a holder of 7,000 shares, failed to pay the allotment money. Afterwards the first call
1400 was made. Vishesh paid the allotment money along with the first call money. Samyesh, holding
2,000shares did not pay the final call. Samyesh's shares were forfeited immediately after the

14040
final call.Out of the forfeited shares, 1,500 shares were reissued at 8per share fully paid-up.
.
Pass the necessary Journal entries for the above transactions in the books of Denspar Ltd.
(CBSE 2019)
Solution: In the Books of Denspar Ltd.
JOURNAL

Date ParticularS LF. Dr. ) Cr. )

Bank A/c ...Dr. 3,60,000
To Equity Shares Application A/c 3,60,000
(Application money received for 1,80,000 shares)
Equity Shares Application AC ..Dr. 3,60,000
To Equity Share Capital A/c 3,60,000
(Application money transferred)
8.94 Doble Entry Book
Keeping-CBSE X
Equity Shares Allotment A/c ..Dr. 23,40,000
To Equity Share
To Securities Capital Alc
Premium Ac
(Allotment money due)
Bank A/c ..Dr.
To Equity Shares Allotment A/c
23,24,000
To Calls-in-Advance A/c
Or
Bank A/c ...Dr. 23,24,000
Calls-in-Arrears A/c ...Dr. 91,000
To Equity Shares Allotment A/c
To Calls-in-Advance A/c 2340 0 0
(Allotment money received except on 7,000 shares and Calls-in-Advance received) 1500%
Equity Shares First CallA/C ..Dr. 12,60,000
To Equity Share Capital A/c
To Securities Premium A/c 3,60,00
(Shares first call due)
Bank A/c ...Dr.
900,00
13,16,000
Calls-in-Advance A/c .Dr. 35,000
To Equity Shares First Call A/c
To Equity Shares Allotment A/c
Or
12,691,0,00000
Bank A/c ...Dr. 13,16,000
Calls-in-Advance A/c ...Dr. 35,000
To Equity Shares First Call A/c
To Calls-in-Arrears Ac 12,91,0
60,00
(First call money received along with Calls-in-Arrears and
Calls-in-Advance adjusted)
|EquityShares Second and Final Call A/c .Dr. 14,40,000
To Equity Share Capital A/C
To Securities Premium A/c 5,40,000
(Second and final call money due)
9,00,000
Bank A/c .Dr. 13,84,000
Calls-in-Advance A/c ...Dr. 40,000
To Equity Shares Second and Final CallA/c 14,24,000
Or
Bank A/c ...Dr. 13,84,000
Calls-in-Arrears A/c ..Dr. 16,000
Calls-in-Advance A/c ..Dr. 40,000
To Equity Shares Second and Final Call A/c 14,40,000
(Second call money received except on 2,000 shares and
Calls-in-Advance adjusted)
Equity Share Capital A/c ..Dr. 20,000
Securities Premium A/c .Dr. 10,000
To Equity Shares Second and Final CallA/c 16,000
To Forfeited Shares A/c
14,000

Equity Share Capital A/c .Dr. 20,000

Securities Premium A/c .Dr.
To Calls-in-Arrears A/c
10,000
16,000
To Forfeited Shares AC
14,000
(2,000 shares forfeited)
 (hapter Company Accounts Accountung for Share Capital 8.95
Bavk A 12000
forleted Shares A/c 3.000
Dr
lo quity Share Capital Ne 15.000
S00shares out of forfetted shares reissued)
Fofeited Shares A/c 7,500
Dt.
lo Capital Reserve A/c 7,500
Balance remaining in Forfeited Shares Account for 1,500 shares
lransferred to Capital Reserve Account)
lustration61,

OnIst April, 2019, Sangita Ltd. issued 30,000 Equity Shares of 10 each at a premium of
4per share, payable as follows:
6onapplication (including ?1premium),
2on allotment (including ?1premium),
3on first call (including ? 1premium), and
I3on second and final call (including ?1 premium).
Applications wereereceived for 45,000 shares, of whichnapplications for 9,000shares were rejected
basis.
and their money was refunded. Rest of the applicants were issued shares on pro rata
Hari, to whom 600 shares were allotted, did not pay the allotment money and his shares were
iorfeited after allotment. Mohan, who applied for 1,080 shares did not pay the two calls and
his shares were forfeited.
1200 forfeited shares were reissued as fully paid-up on receipt of 9per share, the whole of
Mohan's shares being included.
Prepare Cash Book and pass necessary Jounal entries. Also, show share capital in the Balance
Sheet of the company.
Solution: In the Books of Sangita Ltd.
CASH BOOK Cr.
Dr

Particulars Particulars
To Equity Shares Application A/c (45,000 x* 6) 2,70,000 By Equity Shares Application Alc 54,000
To Equity Shares Allotment A/c (WN 1) 23,520 (9,000 shares x?6)
To Equity Shares First Call A/c (WN 2) 85,500| By Balance cld 4,21,320
(28,500shares x*3)
To Equity Shares Second and Final CallA/c (WN 2) 85,500
(28,500 shares x*3)
To Equity Share Capital A/c (1,200 shares x 9) 10,800
4,75,320 4,75,320

JOURNAL

Date Particulars LF. Dr. () Cr.(3)

Equity Shares Application A/c ...Dr. 2,16,000
To Equity Share Capital A/c (30,000 x?) 150,000
To Securities Premium A/c (30,000 x 1) 30,000
To Equity Shares Allotment A/c (6,000 x 6) 36,000
(Application money adjusted)
 3 4
1.
5830 S8300 2,7002,7005400 1,200 6,000 2,98,800 3,00,000 2,97,01,800
00 2,98,800
29
A9 29
AD
60,000| 3,600480 88,200 88,200 9,0001,800 1,200 6,000 No.Note
1
.Dr. ..Dr...Dr. .Dr. ..Dr. .Dr...Dr. ..Dr. ...Dr.
money) Forfeited at...
calls) as
LTD.
allotment 3)
the of SANGITA
x*3) both balance Reserve)
x(900
of
non-payment
x1) (30,000x) 1(6)) ofnon-payment x?2) (29,400
x1) x?2) x1) shares) 3)
A/c credit OF
Capital SHEET
x{2) Call
(30000 shares) (WN 3) (29,400 A/c (29,400
(29,400
shares) x the
XI-CBSE (30,000 x Call (29,400 29,400
10)
(900 Final against to BALANCE
6) A/c (29,400 x2) transferred
A/c 30,000 Alotment
x for A/c 29,400
A/c FinalA/c A/c and for 1) A/c 3(WN
)
A/c forfeited
AWc
Keeping- CapitalPremium
on
5)
(600(WN
A/c
fofeited
A/c Capital
Premium and CapitalA/cPremium x
on (900(900Call Second x* adjusted
A/c Capital
(1,200 A/c
Allotment A/c
due A/c SharesShares Call on Second due Ac A/c First Shares reissue
Reserve each each
Share moneyCapital
Premium due
Hari First ShareSecurities Share call Capital Shares
Premium Shares MohanA/c Sharereissue A/c
Shares
Forfeited Paid-up
Book Securities Forfeited Equity money Securities
Equity fnal Forfeited Shares LIABILITIES each 10 10
Equity
Shares Share Equity of Shares
shares Shares and Share Equity
Equity of Equity Account)
Shares on
Capital Funds
Shareholders' 10 of Fullyof
?
(AMotment shares on (profit) of? Shares
Entry Securities
tquity
call
Equity (Second Securities Forfeited(Discount Capital
Authorised Capital Shares
Subscríbed Shares
Forfeited
A/c
tquity
lo lo tquity To To
D00 To To (Hrst To To Equity To To To (900 To To (Gain AND Capital
Share ACcounts 1. Shares
Capital
Share Capital
Issued
and
Equity
Equity Subscribed
Double to
Wote
EQUITY Equity 30,000 29,700
ParticularS Particulars
96
I.
 36,000 7,2001,2006,000 3,600 1,300 a surplus credited
forfeiture,
97 1200729 480 60.000 480 23,520
24,000 shares. 5,400 1800 as
Sheet
28,500 as was
Capita Balance receivedof
shares. timeAccount
shares.
Mohan's
Share =
Mohan the
the is
tor 28,500 -x
300 120 at Premium
in Therefore,
Aecoueirg Mohan=
of
3,600
shown this
shares 600 offorfeiture
Securities
a of
as be out company.
120 900 will
Actounts-- shares balance? shares of
-
shares 1=600, because
sharesshares reissued of
720 720 900 300 600 unissued the time
Company = ={ adjusted
allotment
on and x*6) =
such -900
shares 29,400 ofshares x²
shares3,600 yet
by it, the
cancel
600 1,080 as Reserve x receivedat
600
6 1) 1(6)) 300 not
applrotion x (6,000 x
money, on 900
include shares each
shares@71
shares = been480 to consldered
36.000
90,000
Hart allotmernt: x 72) received on
shares (600 [WN 30,000
36,000 29,400
on
received
Capital
A/c
Harl
hapter rom x adjusted
(30,000 call Mohan' s
Capital
Hari of to not by be
appled
for recetved120 final be Hari's to Shares amount allotted debited
an on Hari
Premium) by allotment = allotted which transferred has also
Aari Har xt6e Hari application
money money
allotment paid and will Reserve:
Hari. of of 480 should
Share ofreissue Account: Forfeited
1,200
trom by by allotment: second money reissuedrespectrespect forfeitedshares be
to
alotted
were money paid not shares. of oft will
shares)paid been
receved have of Securities application on
but be Capital 300 Hari BalanceThls
part not received in in be Shares 600 AcCOunt
must appication
600 not on on
due due 1,080have and will call beenbalance forfeited to
forfeited of
balance that allotment,
but x2
shares
600 a
as but received
amount Amount must first money final to
Transferred on
Loss
Less:
reissue of
shares
Forfeited
on
noted premium Premlum
money.
he - due L5s 600 of due
Excess Excess amountfor have
haresfherefore shares part applied paid and the Amount Amount
(b) the Capital.
ofpart
Rots
Working fcess Amount R Amount
20
Amount
Total
Less: Less: Net
he
not
Therefore,
call Second shares
First
and
on
Gain in
600
on
Therefore,be
should
of
applcation
time
Securities
Securities
00 Mohan Amount Mohan Balance
has 1.200 Profit the
He (a) (b) (a) It at
()
) 3. 4. 5.