CBSE 2025, Set 2

Question

(a) Alpha Ltd. invited applications for issuing 50,000 equity shares of ₹ 10 each at a premium of ₹ 2 per share. The amount was payable as follows:
On application: ₹ 4 per share
On allotment: ₹ 5 per share (including premium)
On first and final call: ₹ 3 per share

Applications were received for 70,000 shares. Applications for 10,000 shares were rejected and pro-rata allotment was made to the remaining applicants. Excess money received on application was adjusted towards sums due on allotment. Mohan, who had applied for 1,200 shares, failed to pay the allotment and call money. His shares were forfeited. All the forfeited shares were reissued at ₹ 9 per share fully paid up.

Pass necessary journal entries in the books of Alpha Ltd.

Edvaya · Accepted Answer

The correct answer is Subjective. **Books of Alpha Ltd. - Journal** | Date | Particulars | L.F. | Dr. Amount (₹) | Cr. Amount (₹) | |---|---|---|---|---| | | Bank A/c ...Dr.     To Equity Share Application A/c (App money received on 70,000 shares @4) | | 2,80,000 | 2,80,000 | | | Equity Share Application A/c ...Dr.     To Equity Share Capital A/c (50,000 × 4)     To Equity Share Allotment A/c (10,000 excess × 4)     To Bank A/c (10,000 rejected × 4) (Transfer of app money and excess adjusted/returned) | | 2,80,000 | 2,00,000 40,000 40,000 | | | Equity Share Allotment A/c ...Dr.     To Equity Share Capital A/c (50,000 × 3)     To Securities Premium A/c (50,000 × 2) (Allotment money due) | | 2,50,000 | 1,50,000 1,00,000 | | | Bank A/c ...Dr. Calls in Arrears A/c ...Dr.     To Equity Share Allotment A/c (Allotment money received except on Mohan's shares. *Note: Mohan allotted 1,000 shares. Total due = 5,000. Excess app = 200×4=800. Arrears = 4,200*) | | 2,05,800 4,200 | 2,10,000 | | | Equity Share First and Final Call A/c ...Dr.     To Equity Share Capital A/c (50,000 × 3) (Call money due) | | 1,50,000 | 1,50,000 | | | Bank A/c ...Dr. Calls in Arrears A/c ...Dr.     To Equity Share First and Final Call A/c (Call money received except on Mohan's 1,000 shares) | | 1,47,000 3,000 | 1,50,000 | | | Equity Share Capital A/c (1000 × 10) ...Dr. Securities Premium A/c (1000 × 2) ...Dr.     To Share Forfeiture A/c (App money paid: 1200×4)     To Calls in Arrears A/c (4200 + 3000) (Mohan's 1,000 shares forfeited) | | 10,000 2,000 | 4,800 7,200 | | | Bank A/c (1000 × 9) ...Dr. Share Forfeiture A/c (1000 × 1 discount) ...Dr.     To Equity Share capital A/c (Reissue of 1,000 shares at ₹ 9 per share) | | 9,000 1,000 | 10,000 | | | Share Forfeiture A/c ...Dr.     To Capital Reserve A/c (Profit on reissue transferred: 4,800 - 1,000) | | 3,800 | 3,800 |

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Accountancy > Accounting For Companies > Accounting For Share Capital

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