Vani Limited invited applications for issuing 1,00,000 equity shares of * 10 each at a premium of 10%. ……………………

Question :Vani Limited invited applications for issuing 1,00,000 equity shares of
* 10 each at a premium of 10%. The amounts were payable as under :
On Application and Allotment — % 4 per share (including premium 21)
On first call — 2 4 per share
On second and final call — 7 3 per share
Applications for 1,50,000 shares were received and pro-rata allotment
Was made to all the applicants.
Excess application money was adjusted towards sums due on calls.
ha Parth, at a Re shareholder eee who had applied for 600 shares did not pay the were forfeited. The second and final call was not yet made. Half of the forfeited shares were reissued at % 8 per share
lly paid up. ae et ec Journalise the above transactions in the books of Vani Limited by opening calls in arrears and calls in advance account where
Neces sary ;

The correct answer is -The journal entries for the given transactions can be recorded as follows:

On receipt of applications:

Bank Account Dr. 21,00,000 Share Application Account Cr. 21,00,000

Being the amount received on applications for 1,50,000 shares at Rs.14 per share)

On pro-rata allotment:Share Application Account Dr. 21,00,000 Share Capital Account Cr. 10,00,000 Share Premium Account Cr. 11,00,000

(Being the pro-rata allotment of shares to the applicants)

On forfeiture of shares:Share Capital Account Dr. 2,40,000 Share Premium Account Dr. 1,32,000 Share Forfeiture Account Cr. 3,72,000 (Being the forfeiture of 600 shares applied by Parth, who failed to pay the allotment and call money)

On re-issue of forfeited shares:Bank Account Dr. 24,000 Share Forfeiture Account Dr. 1,20,000 Share Capital Account Cr. 2,40,000 Share Premium Account Cr. 1,04,000 (Being the re-issue of 300 forfeited shares at Rs.8 per share, which were fully paid-up)

On first call:Share Capital Account Dr. 1,20,000 Share First Call Account Cr. 1,20,000 (Being the first call of Rs.2 per share made on 1,00,000 shares)

On receipt of first call:Bank Account Dr. 2,40,000 Share First Call Account Dr. 1,20,000 Share Capital Account Cr. 1,20,000 (Being the receipt of first call money on 1,00,000 shares)

On second and final call:Share Capital Account Dr. 7,30,000 Share Second and Final Call Account Cr. 7,30,000 (Being the second and final call of Rs.7.5 per share made on 1,00,000 shares)

On adjustment of excess application money towards call money:Share First Call Account Dr. 2,10,000 Share Second and Final Call Account Dr. 1,05,000 Share Application Account Cr. 3,15,000 (Being the adjustment of excess application money towards first and second and final call)

On receipt of second and final call money:Bank Account Dr. 7,30,000 Share Second and Final Call Account Dr. 7,30,000 Share Capital Account Cr. 7,30,000 (Being the receipt of second and final call money on 1,00,000 shares)

On transfer to Calls in Arrears Account:Share Second and Final Call Account Dr. 2,17,500 Calls in Arrears Account Cr. 2,17,500 (Being the transfer of amount to Calls in Arrears Account)

On transfer from Calls in Advance Account:Calls in Advance Account Dr. 2,10,000 Share First Call Account Cr. 2,10,000 (Being the transfer of amount from Calls in Advance Account)

Note: The Calls in Arrears Account and Calls in Advance Account are opened to record the unpaid and excess call money respectively. These accounts are used to keep a track of the amount due from the shareholders on calls.