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8.28 Double Entry Book Keeping—CBSE XII

Applications were received for 75,000 Equity Shares. The shares were allotted on pro rata basis to the
applicants for 60,000 shares, the remaining applications being rejected. Money over paid on applications
was utilised towards sum due on allotment.
A, to whom 2,000 shares were allotted, failed to pay allotment and calls money and B, to whom
2,500 shares were allotted, failed to pay the two calls. These shares were, subse quently, forfeited after the
final call was made. All the forfeited shares were reissued to X as fully paid-up @ ` 8 per share.
Pass Journal entries to record the above transactions. [Ans.: Capital Reserve—` 8,300.]
11. Eastern Star Cycle Ltd. was registered with a capital of ` 5,00,000 divided into 20,000 shares of ` 25 each.
The company offered to public for subscription 10,000 shares payable ` 5 per share on application,
` 5 per share on allotment and the balance in two calls of ` 7.50 each. The company received applications
for 11,600 shares. Applications for 1,000 shares were rejected and application money was refunded to the
applicants. A person who applied for 1,000 shares was allotted only 400 shares and excess of his application
money was carried forward towards the payment of allotment and calls. Pass Journal entries to record the
above issue of shares and show how it will be shown in the Balance Sheet.
[Ans.: Balance Sheet Total—` 2,50,000.]
12. Apollo Television Co. Ltd. issued 5,000 Equity shares of ` 10 each credited as fully paid-up to the underwriters
for their underwriting services. Pass necessary Journal entries in the books of the company.
13. A Ltd. has authorised capital of ` 2,00,000, divided into shares of ` 20 each, the whole of which is issued
and subscribed at a premium of ` 2 per share. The amount was payable as:
On application and allotment ` 12 per share (including premium) and on first call ` 2 per share, the balance
as and when required.
The application and allotment money (including premium) was duly received but a share holder holding
500 shares failed to pay the first call and his shares were forfeited. They were later reissued for ` 16 per
share as fully paid-up.
Pass Journal entries for the above.
[Ans.: Capital Reserve—` 3,000.]
14. Radha Mohan Ltd. invited applications for issuing 4,00,000 equity shares of ` 50 each. The amount was
payable as follows:
On Application — ` 15 per share,
On Allotment — ` 25 per share,
On First and Final Call — ` 10 per share.
Applications for 6,00,000 shares were received and pro rata allotment was made to all the applicants on
following basis:
Applicants for 4,00,000 shares were allotted 3,00,000 shares.
Applicants for 2,00,000 shares were allotted 1,00,000 shares.
It was decided that excess amount received on applications will be adjusted towards sums due on
allotment and surplus if any will be refunded. Vibhuti, who was allotted 6,000 shares out of the group
applying for 4,00,000 shares did not pay the allotment money and his shares were forfeited immediately.
Afterwards, these forfeited shares were reissued at ` 30 per share fully paid-up. Later on, first and final call
was made. Shahid, who had applied for 2,000 shares out of the group applying for 2,00,000 shares failed
to pay first and final call and his shares were also forfeited. These shares were afterwards reissued at ` 60
per share fully paid-up.
Pass necessary Journal entries in the books of Radha Mohan Ltd. for the above transactions. (OD 2016 C)
[Ans.: Capital Reserve—` 40,000.]