KS Ltd.invited applications for issuing 1,60,000 equity shares of Rs. 10 each at a premium of Rs. 6 per share. The amount was payable as follows: On Application - Rs. 4 per share (Including premium Rs. 1 per share), On Allotment - Rs. 6 per share (Including premium Rs. 3 per share), On First andFinal Call - Balance. Applications for 3,20,000 shares were received. Applications for 80,000 shares were rejected and application money refunded. Shares were allotted on pro rata basis to theremaining applicants. Excess money received with applications was adjusted towards sums due on allotment. Jain holding 800 shares failed to pay the allotment money. His shares were forfeited immediately after allotment. Afterwards, the final call was made. Gupta who had applied for 1,200 shares failed to pay the final call. These shareswere also forfeited. Out of the forfeited shares, 1,000 shares were reissued at Rs. 8 per share fully paid-up. The reissued shares included all theforfeited shares of Jain. Pass necessary Journal entries for theabove transactions in the books of KS Ltd.

KS Ltd.invited applications for issuing 1,60,000 equity shares of Rs.

1.	KS Ltd.invited applications for issuing 1,60,000 equity shares of Rs. 10 each at a premium of Rs. 6 per share. The amount was payable as follows: On Application - Rs. 4 per share (Including premium Rs. 1 per share), On Allotment - Rs. 6 per share (Including premium Rs. 3 per share), On First andFinal Call - Balance. Applications for 3,20,000 shares were received. Applications for 80,000 shares were rejected and application money refunded. Shares were allotted on pro rata basis to theremaining applicants. Excess money received with applications was adjusted towards sums due on allotment. Jain holding 800 shares failed to pay the allotment money. His shares were forfeited immediately after allotment. Afterwards, the final call was made. Gupta who had applied for 1,200 shares failed to pay the final call. These shareswere also forfeited. Out of the forfeited shares, 1,000 shares were reissued at Rs. 8 per share fully paid-up. The reissued shares included all theforfeited shares of Jain. Pass necessary Journal entries for theabove transactions in the books of KS Ltd.
Answer» Solution : Working NOTES: `{:(" 1. Amount received on Allotment:",Rs.),("Amount due on allotment (1,60,000"xx"Rs.6)","9,60,000"),("LESS: Amount appropriated from shares application","3,20,000"),(,BAR(6,40,000)),("Less: Amount not received on 800 shares(Rs.6,40,000"xx"800/1,60,000)","3,200"),("Amount received",bar(UL(ul(6,36,800)))):}` 2. Amount received and appropriated on 800 shares: Shares allotted to Gupta = 800 `{:("Shares applied by Gupta =800"xx"2,40,000/1,60,000 = 1,200",,Rs.),("Amount received on Application (1,200"xx"Rs.4)",,"4,800"),("Less: Appropriated out of Shares Application Money on Share Capital (800"xx"Rs.3)","Rs.2,400",),("Appropriated out of Shares Application Money on Securities Premium (800"xx"Rs.1)"," "ul(Rs.800),"3,200"),("Excess Shares Application Money adjusted on allotment",,bar(ul(ul(1,600)))),("Amount due on shares allotment:",,):}` `{:(,,"Share Capital",,"Securities Premium"),("Amount due on allotment towards",,"(800"xx"Rs.3)2,400",,"(800"xx"Rs. 3)2,400"),("Less: Excess Shares Application Money",,"1,600",,...),("Amount to be reversed (Not Received)",,bar(ul(ul(" "800))),,bar(ul(ul(2,400)))):}` Excess Application Money is first appropriated towards Share Capital and balance, if any, towards Securities Premium. Hence, excess application money is appropriated towards Share Capital only, as there is no balance left thereafter. `{:(,,Rs.),(" 3. Amount forfeited on shares reissued of Jain",,"4,000"),("Amount forfeited on shares reissued out of Gupta's shares"("Rs." 4,800xx(200)/(800)),,(1,200)/(5,200)),("Less: Discount on reissue (1,000"xx"Rs. 2)",,"2,000"),("Gain on reissue to be transferred to Capital Reserve",,bar(ul(ul(3,200)))):}`

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