Q 110 DK Goel Issue of Shares Solutions Class 12 CBSE (2024-25)

Solution of Question number 110 of Accounting for Companies Issue of shares chapter 6 of DK Goel Class 12 CBSE (2024-25)

Nitro Paints Ltd. invited applications for issuing 1,60,000 equity shares of ₹ 10 each at a premium of ₹ 3 per share. The amount was payable as follows:

Applications for 1,80,000 shares were received. Applications for 10,000 shares were rejected and pro-rata allotment was made to the remaining applicants. Over payment on application were adjusted towards sums due on allotment. All calls were made and were duly received except allotment and final call from Aditya who was allotted 3,200 shares. His shares were forfeited. Half of the forfeited shares were re-issued for ₹ 43,000 as fully paid up.

Pass necessary journal entries for the above transactions in the books of Nitro Paints Ltd.

[Ans. Amount received on allotment ₹ 4,11,600; Capital Reserve ₹ 8,600.]

Hint: Securities Premium A/c will be debited from $ 6,400 at the time of forfeiture of shares.

Solution:-