Page 174 - MA-12

Joint Stock Company—Issue of Shares 6.33

(ii) Amount not received from Harish on Allotment: `
Allotment money due on 80 shares @ 10 800
Less: Excess money received from Harish on application 64
Allotment money not received from Harish 736
(iii) Net amount received on Allotment: `
Allotment money due on 4,000 shares @ ` 10 40,000
Less: Excess amount received on application 3,200
Amount not received from Harish 736 3,936
36,064
2. Calculation of Gain (Profit) on Re-issue to be transferred to Capital Reserve:

160 shares have been reissued which include shares of Harish and Balance 80 shares of Mukesh.
`
Amount forfeited on 80 shares of Harish 384
Ê 1,200` ˆ
Amount forfeited on 80 shares of Mukesh Á ¥ 80 800
˜
¯
Ë 120 1,184
Less: Reissue Discount (160 × ` 2) 320
Gain (Profit) on Re-issue to be transferred to Capital Reserve 864
Illustration 19.
Mahagun Ltd. invited applications for issuing 2,00,000 Equity Shares of ` 10 each. The
amounts were payable as follows:
On application ` 2, on allotment ` 5, on first and final call ` 3.
Applications for 4,00,000 shares were received and the allotments were made as follows:
Category Shares Applied Shares Allotted
I 50,000 40,000
II 1,00,000 30,000
III 2,50,000 1,30,000
All the shares were allotted on pro rata basis and the excess application money was adjusted
towards the sum due on allotment.
Madhu who belonged to Category I and to whom 600 shares were allotted failed to pay the
allotment money. Her shares were forfeited immediately after the allotment money was not
received. Pooja who belonged to Category III and who had applied for 250 shares failed to
pay the final call. Her shares were forfeited after the final call. The forfeited shares were
reissued @ ` 9 per share fully paid-up.
Pass necessary Journal entries in the books of Mahagun Ltd.
Solution: JOURNAL OF MAHAGUN LTD.

Date Particulars L.F. Dr. (`) Cr. (`)
Bank A/c ...Dr. 8,00,000
To Shares Application A/c 8,00,000
(Being the applications received for 4,00,000 shares)
Shares Application A/c ...Dr. 8,00,000
To Share Capital A/c 4,00,000
To Shares Allotment A/c 4,00,000
(Being the shares allotted and application money adjusted)