Q 124 DK Goel Issue of Shares Solutions Class 12 CBSE (2024-25)

Solution of Question number 124 of Accounting for Companies Issue of shares chapter 6 of DK Goel Class 12 CBSE (2024-25)

Phizer Ltd. invited applications for 4,000 equity shares of ₹ 100 each at a premium of ₹ 30 per share. The amount was payable as follows:

Applications for 5,000 shares were received. Allotment was made to all the applicants on pro-rata basis. Excess application money was adjusted towards sum due on allotment. Rocky, to whom 40 shares were allotted, failed to pay allotment and call money. Ali, to whom 90 shares were allotted, failed to pay the call money. These shares were forfeited. The forfeited shares were re-issued @ ₹ 80 per share fully paid-up.

You are required to pass journal entries to record the above transactions in the books of the company.

[Ans. Amount received on allotment ₹ 1,98,000; Capital Reserve ₹ 5,300.]

Hint: Securities Premium A/c will be debited from ₹ 800 at the time of forfeiture of shares.

Solution:-