Forfeiture and reissue help!!

im not able to tally d b/s fr dis problem....can ny one provide me d solution

 

Varun ltd. registered with a nominal capital of Rs.20,00,000 in equity shares of Rs.100 each. 10,000 shares were issued to the public at premium of Rs.20 per share, payable as to Rs.20 on application, Rs.45 on allotment including premium, Rs.25 at first call and the balance on final call.Applications were recieved for 13,000 shares and allotment was made pro-rata to the applicants of 12000 shares. Money over paid on application was employed on account of sums due on allotment. Sudhir holding 200 shares paid the whole of the amount due on first call along with the allotment but failed to pay final call. Pradeep holding 300 shares failed to pay the two calls and Joshi holding 400 shares failed to pay the final call.

 

All these shares were forfeited after the final call. Of the shares forfeited, 200 shares belonging to Pradeep and 200 shares belonging to Joshi were sold to Rajesh as fully paid for Rs.90 per share.

 


 

Replies (3)

Please post me the working you have done on empowertheloser.com in the page 'the consultant's blog' and I will point out the missing links for you to complete this yourself or send me a mail on careercounseling @ empowertheloser.com wth the attached working

dis is my answer is dis correct???

 

share forfeiture a/c dr           19000

to capital reserve                                   19000

I have attached the journal entries and the balance sheet. It is a rough format but I am sure you would understand. I have not transfered the balance to capital reserves, and have assumed that

1. The total shares alloted to these people were 200, 300 and 400, and do not require prorating (13000/12000) as you have said that these were the number of shares alloted to them

2. I have assumed the excess money received has been refunded back

3. I have not transfered the premium/forfeiture/discount account to reserves

This is a quick crude worksheet but you can see the calculations. In case in the hurry or my understanding the calculations are subject to some other interpretation, you can rework but the balance sheet in any case will tie.

In case you wish to understand this in further detail, you can either post to me at my blog at empowertheloser.com or send me a mail at inquiry @ empowertheloser.com

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