question_answer

Rihaan Ltd issued a prospectus offering 2,00,000 equity shares of Rs. 10 each, at a premium of Rs. 2 per share, payable as follows : On application Rs. 2.50 per share; on allotment Rs. 4.50 per share (including premium); on first call (three months from allotment) Rs. 2.50 per share and on second call (three months after call) Rs. 2.50 per share. Subscriptions were received for 3,17,000 shares on 23rd April, 2017 and the allotment made on 30th April, was as under:

(i) Allotment in full (two applicants paid in full on allotment in respect of 4,000 shares each)	38,000
(ii) Allotment of two shares for every three shares applied for	1,60,000
(iii) Allotment of one share for every four shares applied for	2,000

Cash amounting to Rs. 77,500 (being application money received with applications on 31,000 shares upon which no allotments were made) was returned to applicants on 6th May, 2015. The amounts called from the allottees were received on the due dates with the exception of the final call on 100 shares. These shares were forfeited on 15th November, 2017 and reissued to A on 16th November for payment of Rs. 9 per share. Record journal entries, other than those relating to cash in the books of Rihaan Ltd. Or Taj Ltd invited applications for 1,00,000 shares of Rs. 10 each at a premium of 20% payable as follows :

On application	Rs. 3 per share
On allotment	Rs. 5 per share (including premium)
On first call	Rs. 1 per share
On second and final call	Rs. 3 per share

Applications were received for 1,50,000 shares and pro-rata allotment was made on 1,20,000 shares. The remaining applications being refused. A, to whom 4,000 shares were allotted failed to pay the allotment money and on his subsequent failure to pay first call, his shares were forfeited. B, to whom 5,000 shares were allotted failed to pay the two calls. His shares were also forfeited. Out of the forfeited shares, 8,000 shares were re-issued to C credited as fully paid-up for Rs. 15 per share (whole of as shares being included). Give journal entries.

Answer:

Capital reserve = Rs. 650 Or Allotment received = Rs. 4,22,400 and capital reserve = Rs. 38,400