R.K. Ltd. invited application for issuing 70,000 Equity Shares of Rs. 10 each at a premium of Rs. Per share. The amount was payable as follows: {:("On Application",,-,,"Rs. 15 (including Rs. 12 premium),"),("On Allotment",,-,,"Rs.10 (including Rs. 8 premium),"),("On First and Final call",,-,,"Balance."):} Applications for 65,000 shares were received and allotment was made to all the applicants. A shareholder, Ram, who was allotted 2,000 shares, failed to pay theallotment money. His shares were forfeited immediately after allotment. Afterwards, the first and final call was made. Sohan, who had 3,000 shares, failed to pay the first and final call. His shares were also forfeited. Out of the forfeited shares, 4,000 shares were reissued at Rs. 50 per share fullypaid-up. The reissued shares uncluded all the shares of Ram. Pass necessary Journal entries for the above transactions in thebooks of R.K. Ltd.

R.K. Ltd. invited application for issuing 70,000 Equity Shares of Rs.

1.	R.K. Ltd. invited application for issuing 70,000 Equity Shares of Rs. 10 each at a premium of Rs. Per share. The amount was payable as follows: {:("On Application",,-,,"Rs. 15 (including Rs. 12 premium),"),("On Allotment",,-,,"Rs.10 (including Rs. 8 premium),"),("On First and Final call",,-,,"Balance."):} Applications for 65,000 shares were received and allotment was made to all the applicants. A shareholder, Ram, who was allotted 2,000 shares, failed to pay theallotment money. His shares were forfeited immediately after allotment. Afterwards, the first and final call was made. Sohan, who had 3,000 shares, failed to pay the first and final call. His shares were also forfeited. Out of the forfeited shares, 4,000 shares were reissued at Rs. 50 per share fullypaid-up. The reissued shares uncluded all the shares of Ram. Pass necessary Journal entries for the above transactions in thebooks of R.K. Ltd.
Answer» SOLUTION :Amount TRANSFERRED to Capital Reserve - RS. 16,000, i.e.,Rs. 6,000 (RAM's Shares) + Rs. 10,000(SOHAN's Shares). Amount forfeited on Ram's Shares - Rs. 6,000 and Sohan's Shares - Rs. 15,000.

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