Question

Shiva Ltd., invited applications for issuing 2,00,000 Equity Shares of Rs. 100 each at a premium of Rs. 60 per share. The amount was payable as follows :
On application Rs. 30 per share (including premium Rs. 10).
On allotment Rs. 70 per share (including premium Rs. 50).
On first and final call the balance amount.
Applications for 1,90,000 shares were received. Shares were allotted to all the applicants and he company received all money due on allotment except Jain who had been alloted 1,000 shares, and his shares were immediately forfeited. Afterwards first and final call was made. Gupta did not pay the first and final call on his 2,000 allotted shares. His shares were also forfeited. 50% of the forfeited shares of both Jain and Gupta were re-issued for Rs. 90 per share fully paid up. Pass necessary journal entries in the books of Shiva Ltd. for the above trnsactions.

Answer 1

Amount received on Allotment Rs. 1,32,30,000. Amount received on first and final call Rs. 1,12,20,000, Forfeiture amount Rs. 20,000 + Rs. 80,000, Capital Reserve Rs. 35,000.
Hint : Securities Premium Reserve Reserve A/c will be debited from Rs. 50,000 at the time of forfeiture of 1,000 shares and it will not be debited at the time of forfeiture of 2,000 shares.