Question

Manvet Ltd. invited applications for issuing 10,00,000 equity shares of Rs. 10 each payable as follows:
`{:("On application and allotment",-,"Rs. 4 per share (including premium Rs. 1),"),("On first call",-,"Rs. 4 per share,"),("On second and final call",-,"Rs. 3 per share."):}`
Applications for 15,00,000 shares were received and pro rata allotment was made to all the applicants. Excess application money was adjusted on the sums due on calls. A shareholder who had applied for 6,000 shares did not pay the first, and the second and final call. His shares were forfeited. 90% of the forfeited shares were reissued at Rs. 8 per share fully paid-up.
Pass necessary Journal entries for the above transactions in the books of the company.

Answer 1

1. Calculation of first call money not received:
Number of shares allotted to the defaulting shareholder = `(10,00,000)/(15,00,000) xx 6,000 = 4,000` shares:
`{:("Excess Application and Allotment money received (2,000"xx"Rs.4)=Rs.8,000",,Rs.),("First call money due (4,000"xx"Rs.4)",,"16,000"),("Less: Excess Application and Allotment Money adjusted",," 8,000"),("First Call Money due but not received",,bar(ul(ul(8,000)))):}`
`{:(" 2. Calculation of first call money received later:",,Rs.,,Rs.),("First call money due (10,00,000"xx"Rs. 4)",,,,"40,00,000"),("Less: Excess Application and Allotment money adjusted on call",,"20,00,000",,),(" Money not paid by defaulting shareholder(WN 1)" ,,ul(" "8,000),,ul(20,08,000)),(,,,,ul(ul(19,92,000))):}`
`{:(" 3. Calculation of gain on reissue of forfeited shares to be ransferred to Capital Reserve:",,Rs.),("Amount forfeited on forfeited shares (Rs.20,000/4,000"xx"3,600)",,"18,000"),("Less: Reissue discount (3,600"xx"Rs. 2)",," 7,200"),("Gain on reissue to be transferred to Capital Reserve",,bar(ul(ul(10,800)))),(,,):}`