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Question -

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.



Answer -

Books of Life machine tools Limited 

Date

Particulars

L.F.

Debit

Amount

Rs

Credit

Amount

Rs

 

Bank A/c

Dr.

 

3,50,000

 

 

 

To Share Application A/c

 

 

3,50,000

 

(Application money received on application for 70,000 shares @ Rs 5 per share including premium Rs 2)

 

 

 

 

 

 

 

 

 

 

Share Application A/c

Dr.

 

3,50,000

 

 

 

To Share Capital A/c

 

 

 

1,50,000

 

 

To Securities Premium A/c

 

 

 

1,00,000

 

 

To Share Allotment A/c

 

 

 

60,000

 

 

To Bank A/c

 

 

 

40,000

 

(Share Application money for 50,000 shares transferred to Share

Capital Account and Securities Premium,  Rs 60,000

adjusted to Allotment and Rs 40,000 returned)

 

 

 

 

 

 

 

 

 

Share Allotment A/c

Dr.

 

2,00,000

 

 

 

To Share Capital A/c

 

 

 

2,00,000

 

(Share Allotment money due on 50,000 shares @ Rs 4 per share)

 

 

 

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

1,40,000

 

 

 

To Share Allotment A/c

 

 

 

1,40,000

 

(Share Allotment money received on share allotment)

 

 

 

 

 

 

 

 

 

 

 

 

 

Share First and Final A/c

Dr.

 

1,50,000

 

 

 

To Share Capital A/c

 

 

 

1,50,000

 

(Share First and Final Call money due on 50,000 shares @ Rs 3 per share)

 

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

1,48,500

 

 

 

To Share First and Final A/c

 

 

1,48,500

 

(Share First and Final Call money received from 49,500 shares @ Rs 3 per share and 500 shares failed to pay)

 

 

 

 

 

 

 

 

 

Share Capital A/c (500×10)

Dr.

 

5,000

 

 

 

To Share First and Final Call A/c (500×3)

 

 

 

1,500

 

 

To Share Forfeiture A/c (500×7)

 

 

 

3,500

 

(500 shares @ Rs per share fully paid up forfeited for the non-

payment of Share First and Final Call Rs 3 per share)

 

 

 

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

4,000

 

 

Share Forfeiture A/c

Dr.

 

1,000

 

 

 

To Share Capital A/c

 

 

 

5,000

 

(500 Shares reissued @ 8 per share fully paid up)

 

 

 

 

 

 

 

 

 

 

 

 

 

Share Forfeiture A/c

Dr.

 

2,500

 

 

 

To Capital Reserve A/c

 

 

2,500

 

(Balance of 500 shares in Forfeiture Account after

adjustment, transferred to Capital Reserve Account)

 

 

 

 

 

 

 

 

 

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