Joy Ltd. invited applications for issuing 20,000 equity shares of Rs. 10 each at per. The amount was payable as follows:
{:("On Application ",,-,,"Rs. 3 per share"),("On Allotment",,-,,"Rs. 4 per share"),("On First Call and Final Call",,-,,"Balance amount"):}
The issue was oversubscribed by three times. Applications for 20% shares were rejected and the money was refunded. Allotment was made to the remaining applicants as follows:
{:("Category",,"No.of Shares Applied",,"No. of Shares Allotted"),("I",,"30,000",,"15,000"),("II",,"18,000",,"5,000"):}
Excess money receivedwith applications was adjusted towards sums due on allotment.Money in excess to sums due on allotment was adjusted towards sums due on first andfinal call and any money in excess to sums due on first and final call was refunded. Kavi, a shareholder who had applied for 600 shares, failed to pay the remaining allotment money andhis shares were immediately forfeited. Kavi belonged to Category I.
Afterwards the first and final call was made. Gupta, who had applied for 400 shares, failed to pay the first andfinal call. Gupta also belonged to Category I.
Shares of Gupta were also forfeited after the first and final call. The forfeited shares were reissued at Rs. 12 per share fully paid -up.
Pass necessary Journal entries for the above transactions in the books of Joy Ltd.

Class 12 Accounts in Class 12 3 years ago

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+10 pts

Solution :

Working Notes:
1. Number of Shares applied for by the publicandpro rata ALLOTMENT made
= 30,000 + 18,000 = 48,000
THEREFORE, Total Number of Shares applied for by the public
`=48,8000 xx(100)/(100-20)=60,000" shares".`
2. Table Showing Adjustment of Excess APPLICATION Money

*Category III `to` Allotment = 60,000(Shares Applied) - 48,000 (Shares Alloted) = 12,000 shares.
3. Calculation of allotment money due but not paid by Kavi:
Number of shares applied in Category I = 30,000
Number of shares allotted in Category I = 15,000
Ratio of shares applied and allotted = 30,000: 15,000 = 2 : 1
Shares allotted to Kavi= 600`xx` 1/2 = 300 shares
Excess application money paid by Kavi towards shares allotment = `(600xx"Rs."3)-(300xx"Rs."3)` = Rs. 900
`{:(,,Rs.),("Allotment money due from Kavi(300"xx"Rs.4)",,"1,200"),("Less: Excess application money adjusted towards allotment:",," "900),(,,bar(ul(ul(" "300)))):}`
4. Calculation of allotment money received later:
`{:(,,Rs.),("Shares Allotment money due (20,000"xx"Rs.4)",,"80,000"),("Less: Excess application money adjusted on allotment (WN2)",,"65,000"),(,,ul(15,000)),("Less: Allotment money not paid by Kavi",,""300),(,,bar(ul(ul(14,700)))):}`
5. Shares allotted to Gupta = 400 `xx 1//2` = 200 shares
Amount not paid by Gupta on Call = 200 `xx` Rs. 3 = Rs. 600.