Naman Ltd. issued 20,000 shares of Rs.100 each, payable Rs.25 on application, Rs.30 on allotment, Rs.25 on first call and the balance on final call. All money duly received except Anubha, who holding 200 shares did not pay allotment and calls money and Kumkum, who holding 100 shares did not pay both the calls. The directors forfeited the shares of Anubha and Kumkum. Give journal entries.
Books of Naman Ltd. Journal Entries
| Date | Particulars | L.F. | Debit (Rs.) | Credit (Rs.) |
|---|---|---|---|---|
| Bank A/c Dr. | 5,00,000 | |||
| To Share Application A/c | 5,00,000 | |||
| (Being application money received on 20,000 shares @ Rs.25 each) | ||||
| Share Application A/c Dr. | 5,00,000 | |||
| To Share Capital A/c | 5,00,000 | |||
| (Being application money transferred to Share Capital) | ||||
| Share Allotment A/c Dr. | 6,00,000 | |||
| To Share Capital A/c | 6,00,000 | |||
| (Being allotment money due on 20,000 shares @ Rs.30 each) | ||||
| Bank A/c Dr. | 5,94,000 | |||
| Calls-in-Arrears A/c Dr. | 6,000 | |||
| To Share Allotment A/c | 6,00,000 | |||
| (Being allotment money received except Anubha's 200 shares) | ||||
| Share First Call A/c Dr. | 5,00,000 | |||
| To Share Capital A/c | 5,00,000 | |||
| (Being first call money due on 20,000 shares @ Rs.25 each) | ||||
| Bank A/c Dr. | 4,92,500 | |||
| Calls-in-Arrears A/c Dr. | 7,500 | |||
| To Share First Call A/c | 5,00,000 | |||
| (Being first call money received except Anubha and Kumkum) | ||||
| Share Final Call A/c Dr. | 4,00,000 | |||
| To Share Capital A/c | 4,00,000 | |||
| (Being final call money due on 20,000 shares @ Rs.20 each) | ||||
| Bank A/c Dr. | 3,94,000 | |||
| Calls-in-Arrears A/c Dr. | 6,000 | |||
| To Share Final Call A/c | 4,00,000 | |||
| (Being final call money received except Anubha and Kumkum) | ||||
| Share Capital A/c Dr. | 30,000 | |||
| To Share Forfeited A/c | 10,500 | |||
| To Calls-in-Arrears A/c | 19,500 | |||
| (Being 300 shares forfeited for non-payment) |
Working Notes:
1. Calculation of Calls-in-Arrears:
- Anubha (200 shares): Allotment = = Rs.6,000; First Call = = Rs.5,000; Final Call = = Rs.4,000; Total = Rs.15,000
- Kumkum (100 shares): First Call = = Rs.2,500; Final Call = = Rs.2,000; Total = Rs.4,500
- Total Calls-in-Arrears = Rs.19,500
2. Share Forfeited Amount Calculation:
- Anubha: Application money received = = Rs.5,000
- Kumkum: Application + Allotment received = () + () = Rs.5,500
- Total Share Forfeited = Rs.10,500
Explanation
This question tests the student's understanding of share issue accounting with calls-in-arrears and forfeiture. The key points are: (1) Anubha failed to pay allotment and both calls, so only application money was received for her 200 shares; (2) Kumkum paid application and allotment but failed to pay both calls; (3) The forfeiture entry credits Share Forfeited A/c with the amount actually received from shareholders and credits Calls-in-Arrears A/c with the unpaid amounts.
Solution Steps
Step 1: Pass entry for application money received (20,000 × Rs.25 = Rs.5,00,000)
Step 2: Transfer application money to Share Capital
Step 3: Pass allotment entry and record Calls-in-Arrears for Anubha (200 × Rs.30 = Rs.6,000)
Step 4: Pass first call entry and record Calls-in-Arrears for Anubha (Rs.5,000) and Kumkum (Rs.2,500)
Step 5: Pass final call entry and record Calls-in-Arrears for Anubha (Rs.4,000) and Kumkum (Rs.2,000)
Step 6: Pass forfeiture entry - Debit Share Capital (300 × Rs.100), Credit Share Forfeited (Rs.10,500) and Calls-in-Arrears (Rs.19,500)