shiva Ltd. invited application for issuing 2,00,000 Equity shares of Rs.100 each ta 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 & final call and balance amont
Application for 1,90,000 shares were received . Shares were alloted to all the applicants & the company received all money due on alloment except Jain who had been alloted 1,000 shares, and his shares were immediately forfeited . Afterwards first &final call was made. Gupta did not pay the first & final call on his 2,000 alloted shares. His shares were also forfeited . 50% of the forfeited shares of both Jain & Gupta were re-issued for Rs.90 per share fully paid up.
Pass the journal entries in the books of Shiva Ltd. for the above transactions.
Books of Shiva Ltd. Journal | |||||
Date | Particulars | L.F. | Debit Amount Rs | Credit Amount Rs | |
Bank A/c | Dr. |
| 57,00,000 |
| |
| To Share Application A/c |
|
|
| 57,00,000 |
| (Share Application received for 1,90,000 equity shares) |
|
|
|
|
|
|
|
|
|
|
Share Application A/c | Dr. |
| 57,00,000 |
| |
| To Equity Share Capital A/c |
|
|
| 38,00,000 |
| To Securities Premium A/c |
|
|
| 19,00,000 |
| (Share application transferred to equity share capital and securities premium) |
|
|
|
|
|
| ||||
| Share Allotment A/c | Dr. |
| 1,33,00,000 | |
| To Equity Share Capital A/c |
|
|
| 38,00,000 |
| To Securities Premium A/c |
|
|
| 95,00,000 |
(Share allotment due) |
|
| |||
|
|
|
| ||
| Bank A/c | Dr. |
| 1,32,30,000 |
|
| Calls in Arrears A/c | Dr. |
| 70,000 |
|
| To Share Allotment A/c |
|
|
| 1,33,00,000 |
| (Share Allotment received except 1000 shares) |
|
|
|
|
|
|
|
|
|
|
| Equity Share Capital A/c | Dr. |
| 40,000 |
|
| Securities Premium A/c | Dr. |
| 50,000 |
|
| To Share Forfeiture A/c |
|
|
| 20,000 |
| To Calls in Arrears A/c |
|
|
| 70,000 |
| (1000 equity shares forfeited for the non-payment of share allotment) |
|
|
|
|
|
|
|
|
|
|
| Share First and Final Call A/c | Dr. |
| 1,13,40,000 |
|
| To Equity Share Capital A/c |
|
|
| 1,13,40,000 |
| (Share first and final call due on 1,89,000 shares @ Rs 60 each) |
|
|
|
|
|
|
|
|
|
|
| Bank A/c | Dr. |
| 1,12,20,000 |
|
| Calls in Arrears A/c | Dr. |
| 1,20,000 |
|
| To Share First and Final Call A/c |
|
|
| 1,13,40,000 |
| (Share first and final call received 1,87,000 shares and 2000 share failed) |
|
|
|
|
|
|
|
|
|
|
| Equity Share Capital A/c | Dr. |
| 2,00,000 |
|
| To Share Forfeiture A/c |
|
|
| 80,000 |
| To Calls in Arrears A/c |
|
|
| 1,20,000 |
| (2000 shares of Rs 100 each forfeited for the non-payment of Rs 60 per share) |
|
|
|
|
|
|
|
|
|
|
| Bank A/c | Dr. |
| 1,35,000 |
|
| Share Forfeiture A/c | Dr. |
| 15,000 |
|
| To Equity Share Capital A/c |
|
|
| 1,50,000 |
| (Of the forfeited shares half of Jain and half of Gupta’s forfeited shares re-issued at Rs 90 per shares full paid-up) |
|
|
|
|
|
|
|
|
|
|
| Share Forfeiture A/c | Dr. |
| 35,000 |
|
| To Capital Reserve A/c |
|
|
| 35,000 |
| (Balance of 1500 share in share forfeiture transferred to Capital Reserve) |
|
|
|
|
Calculation of Capital Reserve
Jain’s Share:
Share Forfeiture Credit | Rs 20 per share |
Less: Share Forfeiture Debit | Rs 10 per share on reissue |
Share Forfeiture Credit | Rs 10 per share after reissue |
Capital Reserve = share forfeiture (per share) after reissue × No. of shares reissued
= Rs 10 × 500
= Rs 5,000
Gupta’s Shares
Share Forfeiture Credit | Rs 40 per share |
Less: Share Forfeiture Debit | Rs 10 per share on reissue |
Share Forfeiture Credit | Rs 30 per share after reissue |
Capital Reserve = Share forfeiture (per share) after reissue × No. of shares reissued
= Rs 30 × 1,000
= Rs 30,000
Share Forfeiture transfer to Capital Reserve = 5000 + 30,000
= Rs 35,000