Ownclasses

Shyam Ltd. invited applications for issuing 80,000 Equity Shares of Rs 10 each at a premium of Rs 40 per share. The amount was payable as follows: 
On Application Rs 35 per share (including Rs 30 Premium)
On Allotment Rs 8 per share (including Rs 4 Premium)
On First and Final Call - Balance
Applications for 77,000 shares were received. Shares were allotted to all the applicants. Sundaram to whom 7,000 shares were allotted failed to pay the allotment money. His shares were forfeited immediately after allotment. Afterwards, the first and final call was made. Satyam the holder of 500 shares failed to pay the first and final call. His shares were also forfeited. Out of the forfeited shares 1,000 shares were re-issued at Rs 50 per share fully paid up. The re-issued shares included all the shares of Satyam.

Pass necessary Journal Entries for the above transactions in the books of Shyam Ltd.

 

Answer

Book of Shaym Ltd.

Journal

 

Date

Particulars

 

L.F.

Debit

Amount

Rs

Credit

Amount

Rs

 

Bank A/c

To Share Application

(Share Application received for 77,000 shares at Rs 35 per share)

 

Share Application A/c

To Equity Share Capital A/c

To Securities Premium A/c

(Share Application of 77,000 shares transferred to equity share capital and securities premium)

 

Share Allotment A/c

To Equity Share Capital A/c

To Securities Premium A/c

(Share Allotment due on 77,000 shares)

 

Bank A/c

Calls-in-Arrears A/c

To Share Allotment A/c

(Share allotment received from all allotted shares except 7,000 shares)

 

Equity Share Capital A/c

Securities Premium A/c

To Share Forfeiture A/c

To Calls-in-Arrears A/c

(7,000 shares Rs 9 called-up forfeited for the non-payment of allotment)

 

Share First and Final Call A/c

To Equity Share Capital A/c

To Securities Premium A/c

(Share first and final call due on 70,000 shares)

 

Bank A/c

Calls in Arrears A/c

To Share First and Final Call A/c

(Share First and Final Call received on all shares except 500 shares)

 

Equity Share Capital A/c

Securities Premium A/c

To Share Forfeiture A/c

To Calls in Arrears A/c

(500 Shares forfeited for the no non-payment of First and Final Call)

 

Bank A/c

To Equity Share Capital A/c

To Securities Premium A/c

(1,000 shares of Rs 10 each re-issued at premium of Rs 40 per share)

 

Share Forfeiture A/c

To Capital Reserve A/c

(Share forfeiture of 1,000 shares transferred to Capital Reserve)

 

Dr.

 

 

 


 Dr.

 

 

 

 

 

 Dr.

 

 

 

 

Dr.

Dr.

 

 

 

 

Dr.

Dr.

 

 

 

 

 Dr.

 

 

 

 

Dr.

Dr.

 

 

 

 

Dr.

Dr.

 

 

 

 

 

Dr.

 

 

 

  

Dr.

 

26,95,000

 

 

 

 

26,95,000

 

 

 

 

 

 

6,16,000

 

 

 

 

5,60,000

56,000

 

 

 

 

63,000

28,000

 

 

 

 

 

4,90,000

 

 

 

 

 

486,500

3,500

 

 

 

 

5,000

3,000

 

 

 

 

 

50,000

 

 

 

 

 

7,000

 

26,95,000

 

 

 

 

3,85,000

23,10,000

 

 

 

 

 

3,08,000

3,08,000

 

 

 

 

6,16,000

 

 

 

 

 

35,000

56,000

 

 

 

 

70,000

4,20,000

 

 

 

 

 

4,90,000

 

 

 

 

 

4,500

3,500

 

 

 

 

10,000

40,000

 

 

 

 

7,000

 

 Working Note: 

Satyam shares:
Share forfeiture = Rs 9 per share
Share forfeiture on reissue = 0
Transfer to capital reserve: 500*9=4500 Rs.

 

Sundaram:
Share forfeiture = Rs 5 per share
Share forfeiture on reissue = 0
Transfer to Capital Reserve: 500*5= 2500
Total amount transferred to capital reserve = 4500+2500= Rs 7000