Raja Ltd. invited applications for issuing 50,000 Equity Shares of ₹ 10 each. The amount was payable as follows: Applications for 70,000 shares were received. Allotment was made to all applicants on pro rata basis. Excess money received on application was adjusted towards sums due on allotment. Ramesh, who had applied for 700 shares did not pay the allotment money and on his failure to pay the allotment money his shares were forfeited. Afterwards, the first and the final call was made. Adhar, who had been allotted 500 shares, did not pay the first and final call. His shares were also forfeited. Out of the forfeited shares 900 shares were reissued at ₹ 8 per share as fully paid-up. The reissued shares included all the shares of Ramesh. Pass necessary journal entries for the above transactions in the books of the company.

Raja Ltd. invited applications for issuing 50,000 Equity Shares of ₹

1.	Raja Ltd. invited applications for issuing 50,000 Equity Shares of ₹ 10 each. The amount was payable as follows: Applications for 70,000 shares were received. Allotment was made to all applicants on pro rata basis. Excess money received on application was adjusted towards sums due on allotment. Ramesh, who had applied for 700 shares did not pay the allotment money and on his failure to pay the allotment money his shares were forfeited. Afterwards, the first and the final call was made. Adhar, who had been allotted 500 shares, did not pay the first and final call. His shares were also forfeited. Out of the forfeited shares 900 shares were reissued at ₹ 8 per share as fully paid-up. The reissued shares included all the shares of Ramesh. Pass necessary journal entries for the above transactions in the books of the company.
Answer» essary JOURNAL entries for the above transactions in the books of the company are prepared below:Explanation:Shares applied by Ramesh : 700 shares Shares ALLOTED : Application Money received from Ramesh Less: Application money due on allotted shares Excess application money adjusted on ALLOTMENT - Rs. 600Allotment money due on Share allotted Less : Excess application money received - Rs. 600Allotment money due but not received - Rs. 1900Allotment due (Gross) Less: Adjusted - Rs. 60,000Less : Calls-in-Arrears - Rs. 1900Allotment due (Gross) - Adjusted - Calls-in-Arrears = Rs. 1,88,100 Forfeiture of 500 shares issued to Adhar Amount due on First and Final CALL Total amount due on First and Final Call Less: Calls-in-Arrears - Rs. 1000Total amount due on First and Final Call - Calls-in-Arrears - Rs. 98,000Share Forfeiture on Ramesh's - Rs. 2100Properties Share Forfeiture on Adhar's Shares Total = Share Forfeiture on Ramesh's + Properties Share Forfeiture on Adhar's Shares = Rs. 2100 + Rs. 3200 = Rs. 5300Less: Loss on re-issue - Rs. 1800Profit on re-issue transferred capital reserve - Rs. 3500

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