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A Ltd issued 50,000 shares @Rs. 100 each payable Rs.20 on application, Rs.30 on allotment, Rs.20 on first call and the balance on final call. Application received for 40,000 shares. Raman to whom 1,600 shares were allotted failed to pay the final call money and his shares are forfeited. 600 shares are reissued @Rs.90 per share. Show journal entries.?
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A Ltd issued 50,000 shares @Rs. 100 each payable Rs.20 on application,...
Journal Entries:
1. Application Stage:
- Cash A/C Dr. 800,000
- Share Application A/C Cr. 800,000
Explanation:
The company receives applications for 40,000 shares, each with an application payment of Rs. 20. The total amount received is Rs. 800,000, which is debited to the Cash account. The corresponding credit entry is made in the Share Application account, representing the amount received from the applicants.
2. Allotment Stage:
- Share Application A/C Dr. 800,000
- Share Allotment A/C Cr. 1,200,000
- Share Capital A/C Cr. 400,000
Explanation:
The company allots 40,000 shares. The amount already received on application (Rs. 800,000) is debited in the Share Application account and credited in the Share Allotment account. The balance amount of Rs. 400,000 is credited to the Share Capital account, representing the allotment of shares.
3. First Call Stage:
- Share Allotment A/C Dr. 1,200,000
- First Call A/C Cr. 800,000
- Share Capital A/C Cr. 400,000
Explanation:
The company calls for the first installment of Rs. 20 per share on the allotted shares. The amount of Rs. 1,200,000 (40,000 shares x Rs. 30) is debited in the Share Allotment account. The credit entries are made in the First Call account (representing the amount called from the shareholders) and the Share Capital account (representing the increase in share capital due to the first call).
4. Final Call Stage (Forfeiture):
- Raman's A/C Dr. 32,000
- Share Allotment A/C Cr. 32,000
Explanation:
Raman, who was allotted 1,600 shares, fails to pay the final call money. As a result, his shares are forfeited. The amount already paid by Raman on allotment (Rs. 1,600 shares x Rs. 20) is debited in Raman's account, representing the forfeiture of his shares. The corresponding credit entry is made in the Share Allotment account.
5. Reissue of Forfeited Shares:
- Share Forfeiture A/C Dr. 32,000
- Share Capital A/C Cr. 32,000
Explanation:
The forfeited shares are reissued to another shareholder. The amount already forfeited (Rs. 1,600 shares x Rs. 20) is debited in the Share Forfeiture account, representing the reversal of the forfeiture entry. The corresponding credit entry is made in the Share Capital account, representing the reissue of the forfeited shares.
6. Reissue of Forfeited Shares at Discount:
- Bank A/C Dr. 54,000
- Share Forfeiture A/C Cr. 54,000
Explanation:
The forfeited shares are reissued to another shareholder at a discount of Rs. 10 per share. The amount received for the reissue of 600 shares (600 shares x Rs. 90) is debited in the Bank account. The corresponding credit entry is made in the Share Forfeiture account to close the account.
In conclusion, the journal entries record the transactions related
1. Application Stage:
- Cash A/C Dr. 800,000
- Share Application A/C Cr. 800,000
Explanation:
The company receives applications for 40,000 shares, each with an application payment of Rs. 20. The total amount received is Rs. 800,000, which is debited to the Cash account. The corresponding credit entry is made in the Share Application account, representing the amount received from the applicants.
2. Allotment Stage:
- Share Application A/C Dr. 800,000
- Share Allotment A/C Cr. 1,200,000
- Share Capital A/C Cr. 400,000
Explanation:
The company allots 40,000 shares. The amount already received on application (Rs. 800,000) is debited in the Share Application account and credited in the Share Allotment account. The balance amount of Rs. 400,000 is credited to the Share Capital account, representing the allotment of shares.
3. First Call Stage:
- Share Allotment A/C Dr. 1,200,000
- First Call A/C Cr. 800,000
- Share Capital A/C Cr. 400,000
Explanation:
The company calls for the first installment of Rs. 20 per share on the allotted shares. The amount of Rs. 1,200,000 (40,000 shares x Rs. 30) is debited in the Share Allotment account. The credit entries are made in the First Call account (representing the amount called from the shareholders) and the Share Capital account (representing the increase in share capital due to the first call).
4. Final Call Stage (Forfeiture):
- Raman's A/C Dr. 32,000
- Share Allotment A/C Cr. 32,000
Explanation:
Raman, who was allotted 1,600 shares, fails to pay the final call money. As a result, his shares are forfeited. The amount already paid by Raman on allotment (Rs. 1,600 shares x Rs. 20) is debited in Raman's account, representing the forfeiture of his shares. The corresponding credit entry is made in the Share Allotment account.
5. Reissue of Forfeited Shares:
- Share Forfeiture A/C Dr. 32,000
- Share Capital A/C Cr. 32,000
Explanation:
The forfeited shares are reissued to another shareholder. The amount already forfeited (Rs. 1,600 shares x Rs. 20) is debited in the Share Forfeiture account, representing the reversal of the forfeiture entry. The corresponding credit entry is made in the Share Capital account, representing the reissue of the forfeited shares.
6. Reissue of Forfeited Shares at Discount:
- Bank A/C Dr. 54,000
- Share Forfeiture A/C Cr. 54,000
Explanation:
The forfeited shares are reissued to another shareholder at a discount of Rs. 10 per share. The amount received for the reissue of 600 shares (600 shares x Rs. 90) is debited in the Bank account. The corresponding credit entry is made in the Share Forfeiture account to close the account.
In conclusion, the journal entries record the transactions related
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A Ltd issued 50,000 shares @Rs. 100 each payable Rs.20 on application,...
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A Ltd issued 50,000 shares @Rs. 100 each payable Rs.20 on application, Rs.30 on allotment, Rs.20 on first call and the balance on final call. Application received for 40,000 shares. Raman to whom 1,600 shares were allotted failed to pay the final call money and his shares are forfeited. 600 shares are reissued @Rs.90 per share. Show journal entries.?
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A Ltd issued 50,000 shares @Rs. 100 each payable Rs.20 on application, Rs.30 on allotment, Rs.20 on first call and the balance on final call. Application received for 40,000 shares. Raman to whom 1,600 shares were allotted failed to pay the final call money and his shares are forfeited. 600 shares are reissued @Rs.90 per share. Show journal entries.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A Ltd issued 50,000 shares @Rs. 100 each payable Rs.20 on application, Rs.30 on allotment, Rs.20 on first call and the balance on final call. Application received for 40,000 shares. Raman to whom 1,600 shares were allotted failed to pay the final call money and his shares are forfeited. 600 shares are reissued @Rs.90 per share. Show journal entries.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A Ltd issued 50,000 shares @Rs. 100 each payable Rs.20 on application, Rs.30 on allotment, Rs.20 on first call and the balance on final call. Application received for 40,000 shares. Raman to whom 1,600 shares were allotted failed to pay the final call money and his shares are forfeited. 600 shares are reissued @Rs.90 per share. Show journal entries.?.
A Ltd issued 50,000 shares @Rs. 100 each payable Rs.20 on application, Rs.30 on allotment, Rs.20 on first call and the balance on final call. Application received for 40,000 shares. Raman to whom 1,600 shares were allotted failed to pay the final call money and his shares are forfeited. 600 shares are reissued @Rs.90 per share. Show journal entries.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A Ltd issued 50,000 shares @Rs. 100 each payable Rs.20 on application, Rs.30 on allotment, Rs.20 on first call and the balance on final call. Application received for 40,000 shares. Raman to whom 1,600 shares were allotted failed to pay the final call money and his shares are forfeited. 600 shares are reissued @Rs.90 per share. Show journal entries.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A Ltd issued 50,000 shares @Rs. 100 each payable Rs.20 on application, Rs.30 on allotment, Rs.20 on first call and the balance on final call. Application received for 40,000 shares. Raman to whom 1,600 shares were allotted failed to pay the final call money and his shares are forfeited. 600 shares are reissued @Rs.90 per share. Show journal entries.?.
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A Ltd issued 50,000 shares @Rs. 100 each payable Rs.20 on application, Rs.30 on allotment, Rs.20 on first call and the balance on final call. Application received for 40,000 shares. Raman to whom 1,600 shares were allotted failed to pay the final call money and his shares are forfeited. 600 shares are reissued @Rs.90 per share. Show journal entries.?, a detailed solution for A Ltd issued 50,000 shares @Rs. 100 each payable Rs.20 on application, Rs.30 on allotment, Rs.20 on first call and the balance on final call. Application received for 40,000 shares. Raman to whom 1,600 shares were allotted failed to pay the final call money and his shares are forfeited. 600 shares are reissued @Rs.90 per share. Show journal entries.? has been provided alongside types of A Ltd issued 50,000 shares @Rs. 100 each payable Rs.20 on application, Rs.30 on allotment, Rs.20 on first call and the balance on final call. Application received for 40,000 shares. Raman to whom 1,600 shares were allotted failed to pay the final call money and his shares are forfeited. 600 shares are reissued @Rs.90 per share. Show journal entries.? theory, EduRev gives you an
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