Practicing Success
Eicher Ltd. issued 50,000 shares of ₹10 each at a premium of ₹5 per share payable as follows:
Application were received for 72,000 shares. Directors allotted 50,000 shares to the applicants applying for 65,000 shares, the remaining applications being refused. Money overpaid on application was utilised towards sum due on allotment. All the money was duly received with the exception of first call from Rahul, who applied for 2,600 shares. Due to non payment of 1st call his share were forfeited immediately. Later on these share were re-issued at minimum issue price. On the basis of following case study, answer the question. |
Record journal entry for forfeiture of Rahul's shares. |
Share Capital A/c Dr ₹20,000 Share Capital A/c Dr ₹20,000 Share Capital A/c Dr ₹16,000 Share Capital A/c Dr ₹16,000 |
Share Capital A/c Dr ₹16,000 |
The correct answer is Option (3) - Share Capital A/c Dr ₹16,000 Shares applied by Rahul = 2600 Excess money received on application by Rahul = 600 shares x 3 This will be adjusted against allotment. Money due on allotment = 2000 x 5 Money received on allotment = 10000 - 1800 Money due on 1st Call = 2000 shares x 5 Money not received = 10000 Premium that is not received = 2000 shares x 2 Amount received = 2000 shares x 5 Share Capital A/c Dr. ₹16,000 (called up amount) |