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M.58 An Aid to Accountancy—CBSE XII
Z retired on the above date and it was agreed that:
(i) Debtors of ` 6,000 will be written off as bad debts and a provision of 5% on debtors
for doubtful debts will be maintained.
(ii) Patents will be written off and stock, machinery and building will be reduced by 5%.
(iii) X and Y will share future profits in the ratio of 2 : 3.
(iv) Goodwill of the firm on Z’s retirement was valued at ` 90,000.
Pass the necessary Journal entries for the above transactions in the books of the firm
on Z’s retirement. It was decided that amount payable to Z shall be paid after two
years together with interest due @ 12% p.a. (8)
17. Mamta Fab. Ltd. issued 50,000 shares of ` 100 each payable as ` 20 on application;
` 40 on allotment and ` 20 each on two calls. Applications were received for 75,000
shares. Applicants of 25,000 shares were sent letters of regret and application money
was refunded.
Mohan, a holder of 1,500 shares failed to pay allotment money which he paid along
with the first call.
Raman, a shareholder holding 500 shares paid both the calls along with allotment.
Kamal, a shareholder holding 1,000 shares did not pay first call and second and final
call. His shares were forfeited. The forfeited shares were reissued at ` 120 per share
as fully paid-up.
Before forfeiting the shares, a notice through registered post was sent and later a
company official visited personally to deliver the letter for forfeiture.
Pass necessary Journal entries for the above transactions in the books of the company.
Assume that Calls-in-Arrears Account is maintained.
Or
(a) Green Ltd. issued a prospectus inviting applications for 20,000 shares of
` 100 each at a premium of ` 20 per share payable as follows: on application ` 20,
on allotment ` 50 (including premium) and balance on first and final call.
Applications were received for 30,000 shares and pro rata allotment was made to
the applicants for 24,000 shares. It was decided to utilise excess application money
towards the amount due on allotment. Gaurav to whom 400 shares were allotted
failed to pay the allotment money.
Calculate the amount due but not received on allotment from Gaurav and also
calculate allotment money received later on.
(b) D Ltd. forfeited 500 shares of ` 100 each issued at 10% premium (` 90 called-up)
on which the shareholders did not pay ` 30 on allotment (including premium)
and first call of ` 20 each. Out of these, 300 shares were reissued as fully paid-up
for ` 80 per share and 100 shares as fully paid-up at ` 120 per share at different
intervals of time. Before forfeiting the shares, a notice through registered post
was sent and later a company official visited personally to deliver the letter for
forfeiture. Pass necessary Journal entries for forfeiture and reissue of shares and
also, prepare Forfeited Shares Account. (8)