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Issue of Share Capital

The document shows journal entries for share capital raised through a public issue. It records the application and allotment of shares, receipts of capital in call installments, forfeiture of shares due to non-payment and reissue of forfeited shares. Based on the details provided, it calculates capital reserve arising from forfeiture and reissue of shares.

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Nainika Reddy
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100% found this document useful (1 vote)
69 views

Issue of Share Capital

The document shows journal entries for share capital raised through a public issue. It records the application and allotment of shares, receipts of capital in call installments, forfeiture of shares due to non-payment and reissue of forfeited shares. Based on the details provided, it calculates capital reserve arising from forfeiture and reissue of shares.

Uploaded by

Nainika Reddy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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PARTICULARS AMOUNT DEBIT AMOUNT CREDIT

Bank a/c dr 10,80,000 -


To equity share application a/c - 10,80,000

Equity share application a/c dr 10,80,000 -


To equity share capital a/c (1,60,000*5) - 8,00,000
To securities premium reserve a/c - 1,60,000
To share allotment a/c - 60,000
To bank a/c - 60,000

Equity share allotment a/c dr 4,80,000 -


To equity share capital a/c - 3,20,000
To securities premium reserve a/c - 1,60,000

Bank a/c (4,80,000 – 8,400 – 60,000) dr 4,11,600 -


To equity share allotment a/c - 4,11,600

Equity share first call a/c dr 6,40,000 -


To equity share capital a/c - 4,80,000
To securities premium reserve a/c - 1,60,000

Bank a/c dr 6,27,200 -


To equity share first call a/c - 6,27,200

Equity share capital a/c dr 32,000 -


Securities premium a/c dr 6,400 -
To equity share allotment a/c - 8,400
To equity first and final call a/c - 12,800
To equity share forfeiture a/c - 17,200

Bank a/c dr 43,000 -


To equity share capital a/c - 16,000
To securities premium a/c - 27,000

Equity share forfeiture a/c dr 8,600 -


To capital reserve a/c - 8,600

WORKING NOTES –

Application = 5 (5+1)
Allotment = 2 (2+1)
First call = 3 (3+1)
Total = 13 (10+3)

Number of shares issued = 1,60,000


Application received= 1,80,000
Reissue = 3,200

PRO RATA ALLOTMENT


Application received shares allotted
10,000 -
1,70,000 1,60,000
1,80,000 1,60,000

Number of shares allotted = 3,200


Number of applications received = 1,70,000/1,60,000 * 3,200 = 3,400

Application money received = 6 * 3,400 = 20,400


- Application money due =19,200
Excess = 1,200

- Allotment money due = 9,600


Amount not received = 8,400

Amount forfeiture/number of shares forfeited * number of shares reissued – discount on reissue

= 17,200 / 3,200 * 1,600 = 8,600

Q.45

1. Profit on 3000 shares = 5,000

Profit on 1 share = 5,000/3,000 = 5/3

Profit on 1,800 shares = 1,800 * 5/3

= 600 * 5

= 3,000

- Loss on re-issue = 1,800

Capital reserve = 1,200

2.Profit on 1 share = 20

Profit on 15 shares = 20 * 15

= 300

-loss on reissue = 225

Capital reserve = 75

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