Page 87 - DCOM201_ACCOUNTING_FOR_COMPANIES_I

Accounting for Companies-I

Notes Prakash holding 1,000 shares paid the whole of the amount due on first call along with the
allotment but failed to pay the final call. Mr. Yeshpal holding 1,500 shares failed to pay the
two calls and Mr. Rane holding 2,000 shares failed to pay only the final call. All these
shares were forfeited after the final call.
Of the shares forfeited, 1,000 shares belonging to Mr. Yeshpal and 1,000 shares belonging
to Mr. Rane were sold to Mr. Rajheet Singh as fully paid for 90 per share.
Show the journal entries in the banks of company.

Answers: Self Assessment

1. Articles of Association 2. forfeited
3. Share premium 4. True

5. False 6. True
7. False 8. Pro-rata
9. Reputation 10. Section 81

11. right share 12. Time specified
13. Application money

3.9 Further Readings

Books Corporate Accounting - Dr. K.K. Verma

Online links http://moneyterms.co.uk/rights-issue/

http://investmentarticle.com/why-do-companies-conduct-rights-issue.html

80 LOVELY PROFESSIONAL UNIVERSITY