Page 49 - DCOM201_ACCOUNTING_FOR_COMPANIES_I

Accounting for Companies-I

Notes 9. Brij Lal & Co. Limited having a nominal capital of 10,00,000 in shares of 100 each,
invited applications for 5,000 shares, payable as follows:
With application 20

On allotment 25
On first call 35
On second and final call 20
The company received application for 4,500 shares. All the applications were accepted. All
money due on stated above were received with the exception of the second and final call
on 100 shares; these shares were forfeited and reissued as fully paid @ 90 per share.

Record the entries relating to above mentioned transactions in the journal and balance
sheet of the company.
10. (a) Explain fully the procedure to be adopted for forfeiture of shares for non-payment
of allotment and for calls.
(b) ‘X’ Ltd. had an authorised capital of 10,00,000 divided into 10,000 shares of 100
each, out of which 7,500 shares were issued to the public for subscription. The terms
of issue were that 20 was payable on application, 20 per share on allotment, 30
per share on first call and the balance of 30 on second call. All the amounts were
duly received except the following:
From A - Holding 15 shares on which the allotment money and money due on the
first and second call was in arrear.
From B – Holding of 10 shares, on which the first and second call money was in
arrear.
From C – Holding 5 shares on which the second call money was in arrear.
The directors forfeited the shares and reissue the same to D on the following terms:
A’s shares were issued at 90 per share

B’s shares were issued at 70 per share.
C’s share were issued at 50 per share.
Pass journal entries necessary to record the above-mentioned transactions assuming that
D had paid whole amount due from him.
11. New comes Limited issued 4,00,000 equity shares of 10 each, payable as 3 on application,
4 on allotment and 3 on first call. Applications were received for 6,40,000 shares out of
which letters of regret were issued for 1,20,000 shares. Full allotment was made to the
applicants for 1,60,000 shares and pro-rata allotment was made on the balance. A shareholder
holding 400 shares to whom the full allotment was made failed to pay the allotment
money. Another shareholder holding 800 shares to whom pro-rata allotment was made
also failed to pay the allotment money. On call there was a further default on 1200 shares.
All these shares were forfeited the first lot of 1,200 (400 + 800) shares was reissued at 8 per
share. Pass journal entries in the books of the company to record the above transactions.

Answers: Self-assessment

1. False 2. False
3. True 4. Seven

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