Q 88 DK Goel Issue of Shares Solutions Class 12 CBSE (2024-25)

Solution of Question number 88 of Accounting for Companies Issue of shares chapter 6 of DK Goel Class 12 CBSE (2024-25)

The Mohan Ltd., has authorised capital of ₹ 5,00,000 divided into 50,000 shares of ₹ 10 each. the company issued a prospectus inviting applications for 30,000 shares of ₹ 10 each at a premium of ₹ 2 per share, payable as follows: On Application ₹ 3; On Allotment ₹ 5 (including premium); On First Call ₹ 2; On Second and Final Call ₹ 2.

The Company received applications for 45,000 shares and pro-rata allotment was made in respect of applications of 40,000 shares and the remaining applications were rejected. Money overpaid on applications was employed on account of sum due on allotment. All the calls were made.

B, to whom 300 shares were allotted failed to pay the two calls. The company decided to forfeit the shares allotted to B. These shares were subsequently re-issued to C as fully paid for ₹ 9 per share.

Prepare Cash Book and pass the necessary journal entries in the books of the company by Opening Calls in Arrears Account.

[Ans. Bank Balance ₹ 3,61,500; Capital Reserve ₹ 1,500.]

Solution:-