Q 114 DK Goel Issue of Shares Solutions Class 12 CBSE (2024-25)

Solution of Question number 114 of Accounting for Companies Issue of shares chapter 6 of DK Goel Class 12 CBSE (2024-25)

X Limited offered to the public 10,000 equity shares of ₹ 10 each at a premium of ₹ 2 per share payable as follows:

On Application ₹ 3; On allotment (including premium) ₹ 4; On first call ₹ 3 and on second and final call ₹ 2.

Applications were received for 15,000 shares.

All applications were placed under four categories and allotment was made as follows:

Category A	to applicants of 4,000 shares	in full
Category B	to applicants of 6,000 shares	4,000 shares
Category C	to applicants of 3,000 shares	2,000 shares
Category D	to applicants of 2,000 shares	Nil

Except in the cases where applications were wholly rejected, excess application money was not to be refunded but to be adjusted against moneys due on allotment and calls.

A, an applicant under category B to whom 400 shares were allotted failed to pay the allotment money and on his failure to pay the first call his shares were forfeited.

B, an applicant under category C to whom 300 shares were allotted failed to pay both the calls and his shares were also forfeited.

500 of the shares thus forfeited were re-issued to C as fully paid for ₹ 8 per share.

Show Cash Book, Journal entries and the share capital in the Balance Sheet of the company; you are to assume that the whole of the A’s shares were issued to C.

[Ans. Cash received on allotment ₹ 30,000; Capital Reserve ₹ 1,300; Cash at Bank ₹ 1,19,500; subscribed and Fully Paid Capital ₹ 98,000; Share Capital ₹ 99,000.]

Hint: Premium will be debited at the time of forfeiture of A’s Sahres.

Solution:-

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