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Theta Company Ltd. issued 100,000 equity shares at ₹10 each with a ₹2 premium and received applications for 120,000 shares, allotting on a pro-rata basis. All calls were made successfully except for 500 shares held by Rajni, which were forfeited and later reissued to Sambhav at ₹7 each. The journal entries detail the transactions including application, allotment, calls, forfeiture, and reissue of shares.

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2 views

New Ques

Theta Company Ltd. issued 100,000 equity shares at ₹10 each with a ₹2 premium and received applications for 120,000 shares, allotting on a pro-rata basis. All calls were made successfully except for 500 shares held by Rajni, which were forfeited and later reissued to Sambhav at ₹7 each. The journal entries detail the transactions including application, allotment, calls, forfeiture, and reissue of shares.

Uploaded by

hanifulhaque982
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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FUNDAMENTALS OF ACCOUNTING

Theta Company Ltd. Issued 1,00,000 equity shares of ₹10 each at a premium of ₹2 each,
payable as ₹3 on application, ₹5 on allotment (including premium), ₹2 on first call and
the remaining on second and final call. Applications were received for 1,20,000 shares.
Allotment was done on pro-rata basis, and the excess application money was adjusted
towards allotment money. All calls were duly made and all moneys were received except
from Rajni who held 500 shares and failed to pay the money due on both the calls. These
shares were eventually forfeited and reissued to Sambhav @₹7 as fully paid up. Pass
necessary journal entries.
Solution:
In the books of Theta Company Ltd.
JOURNAL
Debit Credit
Date Particulars L.F. Amount Amount
(₹) (₹)
2023
Bank A/c …Dr. 3,60,000
To Share Application A/c 3,60,000
(Application money received on 1,20,000
shares @₹3 each)
Share Application A/c …Dr. 3,60,000
To Share Capital A/c 3,00,000
To Share Allotment A/c (20,000x3) 60,000
(Application money transferred to share
capital account and excess application
money on 10,000 shares refunded)
Share Allotment A/c …Dr. 5,00,000
To Share Capital A/c 3,00,000
To Securities Premium A/c (1L 2,00,000
shares x2)
(Allotment money due on 1,00,000 shares
@₹5 each, including a premium of ₹2)
Bank A/c …Dr. 4,40,000
To Share Allotment A/c 4,40,000
(Allotment money received)
Share First Call A/c …Dr. 2,00,000
To Share Capital A/c 2,00,000
(First call money due on 1,00,000 shares
@₹2 each, except on 500 shares)
Bank A/c …Dr. 1,99,000
To Share First Call A/c 1,99,000
(First call money received)
Share Second & Final Call A/c …Dr. 2,00,000
To Share Capital A/c 2,00,000
(Second and final call money due on
1,00,000 shares @₹2 each)
Bank A/c …Dr. 1,99,000
To Share Second & Final Call A/c 1,99,000
(Second and final call money received,
except on 500 shares)
FUNDAMENTALS OF ACCOUNTING
Share Capital A/c (500 shares x 10) …Dr. 5,000
To Share First Call A/c 1,000
To Share Second & Final Call A/c 1,000
To Share Forfeiture A/c 3,000
(500 Shares forfeited due to non-payment of
1st and 2nd call money)
Bank A/c …Dr. 3,500
Share Forfeiture A/c …Dr. 1,500
To Share Capital A/c 5,000
(Forfeited shares reissued @₹7 per share)
Share Forfeiture A/c …Dr 1,500
To Capital Reserve 1,500
(Balance in share forfeiture account
transferred to capital reserve)
Total 24,00,000 24,00,000

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