Subject: Accountancy, asked on 2/9/17

Question 66 with call in arrear account

Q66. Modern Ltd. issued a prospectus inviting applications for 2,00,000 shares of Rs.10 each at a premium of Rs.6 per share, payable as follows:

                   On Application                    Rs. 5 (including premium Rs.2)

                   On Allotment                       Rs. 5 (including premium Rs.2)

                   On 1st Call                           Rs. 3 (including premium Rs.1)

                   On IInd & Final Call            Rs. 3 (including premium Rs.1)

       Applications were received for 2,60,000 shares and pro-rata allotment was made to the applicants for 2,50,000 shares, Excess money paid on applications for these shares was utilised towards allotment.
        A, who applied for 1,000 shares, failed to pay the allotment money and his shares were forfeited after allotment.
       B, who applied for 1,500 shares, failed to pay the two calls and his shares were also forfeited. 
            Of the shares forfeited, 1,800 shares were re-issued as fully paid up for Rs.15 per share, the whole of B's share being included. Prepare Cash Book and Journal.
         [Ans. Cash at Bank Rs.32,12,000; Cash received on allotment Rs. 7, 47,000; Balance of share Forfeiture A/c Rs. 850; Capital Reserve Rs. 9,750; Balance of Securities Premium Reserve A/c Rs. 12,03,400.]
          Hint. Securities Premium Reserve A/c will be debited from Rs. 1,600 at the time of forfeiture of A's share and from Rs.2,400 at the time of forfeiture of B's shares.}
       

Subject: Accountancy, asked on 2/9/17

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