Question

Jeevan Dhara Ltd. invited applications for issuing 1,20,000 equity shares of Rs.10 each at a premium of Rs.2 per share. The amount was payable as follows: On application - Rs. 2 per share On allotment - Rs.5 per share (including premium) On first and final call – balance Applications for 1,50,000 shares were received. Shares were allotted to all the applicants on prorata basis. Excess money received on applications was adjusted towards sums due on allotment. All calls were made, Manu who had applied for Rs.3,000 shares ** to pay the amount due on allotment and first and final call. Madhur who was allotted Rs.2,400 shares ** to pay the first and final call. Shares of both Manu and Madhur were forfeited. The forfeited shares were reissued at Rs. 9 per share as fully paid up. Pass necessary journal entries for the above transactions in the books of Jeevan Dhara Ltd.

Answer 1

Working Note:

| 1. Applied | Alloted | Excess |
| 1,50,000 | 1,20,000 | 30,000 |

1. Manu

Application money received on 3000 × 2 = 6000

Less: Application money adjusted on 2400 × 2 = 4800

Excess money =1200

Allotment money due 2400 × 5 = 12000

Less: Excess money 1200

Amount not paid on allotment 10800