Page 73 - DCOM201_ACCOUNTING_FOR_COMPANIES_I

Accounting for Companies-I

Notes forfeited. Later, these shares were reissued as fully paid up, to Vikram @ 120 per share.
Expenses regarding the issue of shares were 30,000. Prepare journal, cash book and balance
sheet in the books of company.
Solution:
Cash Book (Bank Column Only)
Dr. Cr.
Date Particulars Date Particulars
To Equity Share 36,50,000 By Equity Share 50,000
Application Account 23,98,000 Application Account
To Equity Share Allotment 4,000 By Expenses on Issue of 30,000
Account Share Account
49,97,500
To Equity Share Capital 5,000 By Balance c/d 1,09,75,500
Account
1,000
(100 × 40)
To Equity Share First and
Final Call Account
(99,950 × 50)
To Equity Share Capital
Account
(50 × 100)
To Share Premium
Account (50 × 20)
1,10,55,500 1,10,55,500
Journal

Date Particulars L.F. Dr. ( ) Cr. ( )
Equity Share Application Account Dr. 36,00,000
To Equity Share Capital Account 20,00,000
To Equity Share Allotment Account 16,00,000
(Being transfer of application money to
share capital and excess application money
to allotment account).
Equity Share Allotment Account Dr. 40,00,000
To Equity Share Capital Account 30,00,000
To Equity Share Premium Account 10,00,000
(Being allotment money due on 1,00,000
shares @ 40 per share including premium)
Equity Share Capital Account (100 × 50) Dr. 5,000
Share Premium Account (100 × 10) Dr. 1,000
To Equity Share Allotment Account 2,000
To Forfeited Shares Account (200 × 20) 4,000
(Being forfeiture of 100 shares for
non-payment of allotment money)
Forfeited Shares Account Dr. 2,000
To Equity Share Capital Account 1,000
To Share Premium Account 1,000
(Being reissue of 100 forfeited shares @ 60
each as paid up 40 each)
If cash transaction is not recorded in
cashbook directly, entry will be: Dr. 4,000
Bank Account (100 × 40) Dr. 2,000
Forfeited Shares Account (100 × 20) Contd...
To Equity Share Capital Account 5,000
(100 × 50)
1,000
To Share Premium Account (100 × 10)
LOVELY PROFESSIONAL UNIVERSITY Dr.
66 Forfeited Shares Account 2,000
To Capital Reserve Account 2,000
(Profit on reissue of 100 forfeited shares
transferred to capital reserve a/c i.e.,
4000 – 2000)
Equity Share First and Final Call Account Dr. 50,00,000
To Equity Share Capital Account 50,00,000
(Being first and final call money due on
1,00,000 shares @ 50 per share)
Equity Share Capital Account (50 × 100) Dr. 5,000
To Equity Share First and Final Call 2,500
Accounts (50 × 50) 2,500
To Forfeited Shares Account
(Being forfeiture of 50 shares for non-
payment of first & final call money)
Forfeited Shares Account Dr. 2,500
To Capital Reserve Account 2,500
(Profit i.e., entire forfeited amount on reissue
transferred to capital reserve a/c)