OTUA Ltd. was registered with an authorised capital of 2,00,000 equity shares of ₹ 100 each. The company offered 60,000 shares for public subscription at 25% premium. The share was payable as ₹ 40 on application and balance on allotment, with premium. Public had applied for 85,000 shares. Pro-rata allotment was made in the ratio of 5:4 and remaining applications were sent letters of regret.
Mr. Anand holding 4,000 shares failed to pay allotment money and his shares were forfeited. Out of these 3,000 shares were re-issued at a discount of ₹ 20 per share. Pass necessary entries in the books of the OTUA Ltd.
Answer :
Books of OTUA Ltd.
Journal Entries
To Equity Share Application A/c
(Application money received on 85,000 shares)
To Equity Share Capital A/c
To Equity Share Allotment A/c
To Bank A/c
(Application money transferred to share capital, share allotment and refunded)
6,00,000
4,00,000
To Equity Share Capital A/c
To Securities Premium A/c
(Allotment due on 60,000 shares with Premium)
15,00,000
Calls in Arrears A/c Dr.
To Equity Share Allotment A/c
(Allotment received on 56,000 shares)
3,00,000
Securities Premium A/c Dr.
To Share Forfeited A/c
To Calls in Arrears A/c
(4,000 shares forfeited for non-payment of allotment money)
1,00,000
3,00,000
Share Forfeited A/c Dr.
To Equity Share Capital A/c
(3,000 shares re-issued @ ₹ 80 per share)
60,000
To Capital Reserve A/c
(Gain on re-issue of forfeited
shares transferred to capital reserve)
Bro how you got the amount of bank AC and share allot ac in 2nd entry with 5:4 ratio
same doubt😂😂
How you have calculated rejected amount of Shares…that is 10,000 shares?
If you will prepare a analytical table it would be easier to make journal entries. In 2nd entry we recieved (85000×₹40) ₹3400000, but actual application money we want was 60000×40=₹2400000 so this will be transferred to share capital.
Can you please help in letting us know how you calculated the 10000 shares and 15000 shares
if bank a/c is 3400000 ..then if we calculate it with the actual amount then it would be 2400000(60000×40=24ooooo)so the balance is 1000000 that should be transferred to allotment
How to get 10000 and 15000
We haven’t told in class analytical table till yet, then how to solve 2nd entry
I have an doubt
How to do it without analytical table