AB Ltd. invited applications for issuing 75,000 equity shares of Rs 100 each at a premium of Rs 30 per share. The amount way payable as follows:
On Application and Allotment Rs 85 per share (including premium)On First and Final call the balance Amount Applications for 1,27,500 shares were received. Applications for 27,500 shares were rejected and share were allotted on pro-rata basis to the remaining applicants. Excess money received on application and allotment was adjusted towards sums due to first and final call. The calls were made. A shareholder, who applied for 1,000 shares, failed to pay the first and final call money. His shares were forfeited. All the forfeited shares were reissued at Rs 150 per share fully paid up.
Pass necessary journal entries for the above transactions in the books of AB Ltd.
Those who applied for 100000 shares are allotted 75,000 shares
Those who applied for 1000 shares are allotted 75,000*1,000/1,00,000 =750 shares
Shares application and allotment received on 1,000 shares of Rs 85 each = Rs 85,000
Shares allotted = 750*85 = 63,750 Rs
Excess application and allotment money received = Rs 21,250
Share first and final call due on 750 shares of Rs 45 each = Rs 33,750
Excess application and allotment money received = 21,250 Rs
Share first and final call not received = Rs 12,500 ( 33,750-21,250)
Therefore share first and final call received = 12,37,500 (12,50,000-12,500)