Life machine tools Limited, issued 50,000 equity shares of Rs 10 each at Rs 12 per share-Accountancy

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Life machine tools Limited, issued 50,000 equity shares of Rs 10 each at Rs 12 per share, payable at to Rs 5 on application (including premium), Rs 4 on allotment and the balance on the first and final call.

Applications for 70,000 shares had been received. Of the cash received, Rs 40,000 was returned and Rs 60,000 was applied to the amount due on allotment, the balance of which was paid. All shareholders paid the call due, with the exception of one share holder of 500 shares. These shares were forfeited and reissued as fully paid at Rs 8 per share. Journalise the transactions.




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Books of Life machine tools Limited

Journal

DateParticularsL.F
Amount
 (Dr.)
Amount
(Cr.)
Bank A/cDr.3,50,000
   To Equity Share Application A/c3,50,000
( Money received for application on
70,000 shares @ Rs. 5 each )
Equity Share Application A/cDr.3,50,000
   To Share Capital A/c1,50,000
   To Securities Premium A/c1,00,000
   To Equity share Allotment A/c60,000
   To Bank A/c40,000
( Equity Share Application money
transferred to Share Capital A/c and
returned cash of Rs 40,000 shares and
Rs.60,000 adjusted to allotment )
Equity Share Allotment A/cDr.2,00,000
   To Equity Share Capital A/c2,00,000
( Allotment money due on 50,000
Shares @ Rs.4 per share )
Bank A/cDr.1,60,000
   To Equity Share Allotment A/c1,60,000
( Being Allotment money received )
Equity Share First call A/cDr.1,50,000
   To Equity Share Capital A/c1,50,000
( Share First call money due on 50,000
shares @ Rs 2 per each )
Bank A/cDr.1,48,500
   To Equity Share First call A/c1,48,500
( Equity Share First call money received
for 49,000 shares @ Rs.3 per share )
Share Capital A/cDr.5,000
   To First and Final call A/c1,500
   To Share Forfeiture A/c3,500
( 500 shares forfeited for non-payment
of First and Final call )
Bank A/cDr.4,000
Share forfeiture A/cDr.1,000
   To share capital A/c5,000
( Reissued of forfeiture shares @ Rs 8
per share )
Share forfeiture A/cDr.2,500
   To Capital Reserve A/c2,500
(Profit on reissue of share transferred
to Capital Reserve)

Chapter-1 Accounting for Share Capital-II


Location: India

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