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12th Standard English Medium Accountancy Subject Company Accounts Creative 5 Mark Questions with Solution Part - II updated Creative Questions

Published on: 13/05/2022

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Questions:

Generic 5

5 x 5 = 25

Global Company issued shares Rs.10 each at 10% premium, payable Rs.2 on application, Rs.3 on allotment (including premium), Rs.3 on first call and Rs.3 on second and final call.
Journalise the transactions relating to forfeiture of shares for the following situations:
i. Muthu who holds 50 shares failed to pay the second and final call and his shares were forfeited.
ii. Muthu who holds 50 shares failed to pay the allotment money, first call and second and final call money and his shares were forfeited.
iii. Muthu who holds 50 shares failed to pay the allotment money and first call and his shares were forfeited after the first call.

Ashok Ltd. forfeited 150 equity shares of Rs.10 each for non payment of final call of Rs.4 per share. Of these 100 shares were reissued @ Rs.9 per share. Pass journal entries for forfeiture and reissue.

Max Ltd. offered Rs.10,000 equity shares Rs.10 each to the public payable as follows:
On application Rs.4; on allotment Rs.3; on first call Rs.2 and on second and final call Rs.1. Applications were received for Rs.20,000 shares. All the applicants were allotted 1 share for every two shares applied. Excess application money was used for amount due on allotment and call. Pass necessary journal entries.

Das Ltd. offered 50,000 equity shares of Rs.10 each to the public payable as follows: On application Rs.4; on allotment Rs.3; on first call Rs.1 and on second and final call Rs.2.
Applications were received for 1,00,000 shares. All the applicants were allotted 1 share for every two shares applied. Excess application money was used for amount due on allotment and call. Pass necessary journal entries.

Preeti Ltd. invited applications for 5,000 shares of Rs.10 each payable as follows:
Rs.3 on Application,
Rs.2 on Allotment,
Rs.2 on First call and
Rs.3 on Final call.
All these shares were subscribed and paid for. Pass journal entries.

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Answers Key:

Generic 5

5 x 5 = 25

(i) When final call money is not paid

In the books of Global company Journal entries
Particulars		Debit Rs.	Credit Rs.
Equity share capital A/c (50 x 10)	Dr.	500
To Equity share second and final call A/c (50 x 3)			150
To Forfeited shares A/c (50 x 7)			350
(50 shares forfeited)

Note: Since the premium amount is received by the company, premium should not be cancelled.
(ii) When allotment, first call money and second and final call money is not paid

In the books of Y company Journal entries
Particulars		Debit Rs.	Credit Rs.
Share capital A/c (50 x 10)	Dr.	500
Share premium A/c (50 x 1)	Dr.	50
To Share allotment A/c (50 x 3)			150
To Share first call A/c (50 x 3)			150
To Share second and final call A/c (50 x 3)			150
To Shares forfeited A/c (50 x 2)			100
(50 shares forfeited)

(iii) When allotment and first call money is not paid

In the books of Y company Journal entries
Particulars		Debit Rs.	Credit Rs.
Share capital A/c (50 x 7)	Dr.	350
Share premium A/c (50 x 1 )	Dr.	50
To Share allotment A/c (50 x 3)			150
To Share first call A/c (50 x 3)			150
To Shares forfeited A/c (50 x 2)			100
(50 shares forfeited)

In the books of Ashok Ltd. Journal entries
Particulars		Debit Rs.	Credit Rs.
Equity share capital A/c (150 x 10)	Dr.	1500
To Equity share final call A/c (150 x 4)			600
To Forfeited shares A/c (150 x 6)			600
(50 shares forfeited)
Bank A/c (100 x 9)	Dr	900
Forfeited shares A/c (100 x 1)	Dr	100
To Equity share capital A/c (100 x 10)			1,000
(100 forfeited shares reissued @ Rs.9 per share)
Forfeited shares A/c	Dr	500
To Capita reserve A/c			500
(Gain in reissue of forfeited shares transferred to capital reserve account)

Forfeited amount for 150 shares = Rs.900
Forfeited amount for 100 shares =\(\frac{300}{150}\) x 100 =Rs.600
Gain or loss = Amount forfeited- discount on reissue
=600-100
Net gain = Rs.500

In the books of Max Ltd. Journal entries
Particulars		Debit Rs.	Credit Rs.
Bank A/c (20,000 x 4)	Dr.	80,000
To Equity share application A/c			80,000
(Application money received)
Equity share application A/c (10,000 x 4)	Dr.	40,000
To Equity share capital A/c			40,000
(Application money transferred to share capital A/c)
Equity share application A/c (10,000 x 4)	Dr.	40,000
To Equity share allotment A/c (10,000 x 3)			30,000
To Calls in advance A/c (balancing figure)			10,000
(Excess amount adjusted towards allotment and call)
Share allotment A/c (10,000 x 3)	Dr.	30,000
To Share capital A/c			30,000
(Allotment money due)
Equity share first call A/c (10,000 x 2)	Dr.	20,000
To Equity share capital A/c			20,000
(First call money due)
Bank A/c	Dr.	10,000
Calls in advance A/c		10,000
To Equity share first call A/c			20,000
(First call money received and calls in advance adjusted)
Equity share second and final call A/c (10,000 x 1)	Dr.	10,000
To Equity share capital A/c			10,000
(Second and final call money due)
Bank A/c (10,000 x 1)	Dr.	10,000
To Equity share second and final call A/c			10,000
(Second and final call money received)

Journal Entries in the Books of Preeti Ltd.
Particulars		Debit Rs.	Credit Rs.
Bank A/c (1,00,000 x 4)	Dr	4,00,000
To Equity shares application A/c			4,00,000
(Application money received)
Equity share application A/c (50000 x 4)	Dr	2,00,000
To Equity share capital A/c			2,00,000
(Application money transferred to share capital A/c)
Equity share application A/c (50000 x 4)	Dr	2,00,000
To Equity share allotment A/c (50000 x 3)			1,50,000
To Calls in advance A/c			50,000
(balancing figure)
(Excess amount adjusted towards allotment and call)
Share Allotment A/c (50,000 x 3)	Dr	1,50,000
To Share Capital A/c			1,50,000
(Allotment money due)
Equity share first call A/c (50,000 x 1)		50,000
To Equity share capital A/c			50,000
(First call money due)
Bank A/c	Dr	50,000
Calls in advance A/c	Dr	50,000
To Equity share first call A/c			1,00,000
(First call money received and calls in advance adjusted)
Equity share second and final
call A/c (50,000 x 2)		1,00,000
To Equity share capital A/c			1,00,000
(Second and final call money due)
Bank A/c (50,000 x 2)	Dr	1,00,000
To Equity share second and final call A/c			1,00,000
(Second and final call money received)

Journal Entries in the Books of Preeti Ltd.
Particulars		Debit Rs.	Credit Rs.
Bank A/c	Dr.	15,000
To Share Application A/c			15,000
(money received on 5,000 shares @ Rs.3 per share)
Share Application A/c	Dr.	15,000
To Share Capital A/c			15,000
(Transfer of application money on 5,000 shares @ Rs.3 each)
Share Allotment A/c	Dr.	10,000
To Share Capital A/c			10,000
(amount due on the allotment of 5,000 shares @ Rs.2 per share)
Bank A/c	Dr.	10,000
To Share Allotment A/c			10,000
(Allotment money received on 5,000 shares @ Rs.2 per share)
Share First call A/c	Dr.	10,000
To Share Capital A/c			10,000
(First call money due on 5,000 shares @ Rs.2 per share)
Bank A/c	Dr.	10,000
To Share First call A/c			10,000
(First call money received for 5,000 shares @ Rs.2 per share
Share Final call A/c	Dr.	15,000
To Share Capital A/c			15,000
(Final call money due on 5,000 shares @ Rs.3 per share)
Bank A/c	Dr.	15,000
To Share Final call A/c			15,000
(Final call money received for 5,000 shares @ Rs.3 per share)