Alfa Limited Invited Applications for 4,00,000 of Its Equity Shares of Rs 10 Each on the Following Terms-Accountancy

 19. Alfa Limited invited applications for 4,00,000 of its equity shares of Rs 10 each on the following terms :

Payable on applicationRs.5 per share
Payable on allotmentRs.3 per share
Payable on first and final callRs.2 per share

Applications for 5,00,000 shares were received. It was decided :

(a) to refuse allotment to the applicants for 20,000 shares;

(b) to allot in full to applicants for 80,000 shares;

(c) to allot the balance of the available shares’ pro-rata among the other applicants; and

(d) to utilise excess application money in part as payment of allotment money.

One applicant, whom shares had been allotted on pro-rata basis, did not pay the amount due on allotment and on the call, and his 400 shares were forfeited. The shares were reissued @ Rs 9 per share. Show the journal and prepare Cash book to record the above.




Books of Alfa Limited

Journal

    








Working Note:


Calculation of amount not received on first call:


Shares applied by Vibha:
=(`\frac{1,00,000}{75,000}`) X 750

= 1,000 shares
Amount received on 1,000 shares @ Rs 4 each

= 4000 Rs
Amount transferred to share capital a/c (750 X 4)

= 3000 Rs
Excess application and allotment money received

= 1000 Rs
Amount due on first call @ Rs 3 each:  2250 Rs
Amount not received on first call

= 1,250 Rs (2250-1000)

Calculation of amount not received on second call:
Shares allotted to Monika

= (`\frac{75,000}{1,00,000}`) X 1000

= 750 shares
Amount not received on second call

= Rs 2250 (750 X 3)













Chapter-1 Accounting for Share Capital-II


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