Q 87 DK Goel Issue of Shares Solutions Class 12 CBSE (2024-25)

Solution of Question number 87 of Accounting for Companies Issue of shares chapter 6 of DK Goel Class 12 CBSE (2024-25)

XYZ Limited has an Authorised Capital of ₹ 4,00,000 divided into shares of ₹ 20 each, the whole of which is issued and subscribed at a premium of ₹ 2 per share. The amount was payable as follows: On Application and Allotment; ₹ 10 per share; On 1st Call ₹ 4 per share (including premium) and the balance as and when required.

The company made both the calls. The application and allotment money was duly received. But a shareholder holding 2,000 shares failed to pay both the calls and his shares were forfeited. These shares were later re-issued at ₹ 14 per share as fully paid.

Give Journal entries regarding the above.

[Ans. Capital Reserve ₹ 8,000.]

Hint: In this question ₹ 10 has been called on application and allotment jointly. therefore, following entries will be passed for application and allotment:

Solution:-