CBSE 2015, Set 1

Question

'BMY Ltd.' invited applications for issuing 1,00,000 equity shares of Rs 10 each at a premium of Rs 10 per share. The amount was payable as follows:
- On application: Rs 10 per share (including Rs 5 premium)
- On allotment: The balance

The issue was fully subscribed. A shareholder holding 300 shares paid the full share money with application. Another shareholder holding 200 shares failed to pay the allotment money. His shares were forfeited. Later on these shares were re-issued for Rs 4,000 as fully paid up.

Pass necessary journal entries for the above transactions in the books of BMY Ltd.

Edvaya · Accepted Answer

The correct answer is Subjective. **In the books of BMY Ltd. — Journal Entries** | Particulars | Dr. (Rs) | Cr. (Rs) | |---|---|---| | Bank A/c Dr. | 10,03,000 | | | To Equity Share Application A/c | | 10,03,000 | | *(Application money on 1,00,000 shares + full allotment on 300 shares)* | | | | Equity Share Application A/c Dr. | 10,03,000 | | | To Equity Share Capital A/c | | 5,00,000 | | To Securities Premium A/c | | 5,00,000 | | To Calls-in-Advance A/c | | 3,000 | | *(Application transferred; 300 shares' excess = 300 × Rs 10 calls-in-advance)* | | | | Equity Share Allotment A/c Dr. | 10,00,000 | | | To Equity Share Capital A/c | | 5,00,000 | | To Securities Premium A/c | | 5,00,000 | | *(Amount due on allotment: 1,00,000 × Rs 10)* | | | | Bank A/c Dr. | 9,95,000 | | | Calls-in-Advance A/c Dr. | 3,000 | | | To Equity Share Allotment A/c | | 9,98,000 | | *(Allotment money received; 200 shares defaulted = 200 × Rs 10 = 2,000 not received)* | | | | Equity Share Capital A/c Dr. | 2,000 | | | Securities Premium A/c Dr. | 1,000 | | | To Share Forfeiture A/c | | 1,000 | | To Equity Share Allotment A/c | | 2,000 | | *(200 shares forfeited; received Rs 5 × 200 = Rs 1,000 on application)* | | | | Bank A/c Dr. | 4,000 | | | To Equity Share Capital A/c | | 2,000 | | To Securities Premium A/c | | 2,000 | | *(200 forfeited shares re-issued at Rs 4,000 as fully paid up)* | | | | Share Forfeiture A/c Dr. | 1,000 | | | To Capital Reserve A/c | | 1,000 | | *(Gain on forfeiture transferred to Capital Reserve)* | | |

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Accountancy > Accounting For Companies > Accounting For Share Capital

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