Q 116 DK Goel Issue of Shares Solutions Class 12 CBSE (2024-25)

Solution of Question number 116 of Accounting for Companies Issue of shares chapter 6 of DK Goel Class 12 CBSE (2024-25)

X Ltd. invited applications for issuing 80,000 equity shares of ₹ 10 each at a premium of $ 2 per share. The amount was payable as follows:

On application ₹ 6 (including premium) per share.

On Allotment ₹ 3 per share

Balance on first and final call.

Applications for 90,000 shares were received. Applications for 5,000 shares were rejected and pro-rata allotment was made to the remaining applicants. Over payments received on application was adjusted towards sums due on allotment. All calls were made and were duly received except the allotment and final call on 1,600 shares allotted to Vijay. These shares were forfeited and the forfeited shares were re-issued for ₹ 18,400 fully paid up.

Pass necessary journal entries in the books of the company.

[Ans. Amount received on allotment ₹ 2,05,800; Capital Reserve ₹ 7,000]

Hint: Securities Premium will not be debited at the time of forfeiture of shares.

Solution:-