S Ltd. issued 40,000 equity shares of $ 10 each at a premium of $ 2.50 each to the public. The amount was payable as to $ 2 on application, $ 4.50 on allotment (including premium) and $ 6 on call. Owing to heavy over subscription allotment was made as under: (a) Applicants for 23,000 shares (in respect of applications for 2,000 or more shares) were allotted 10,560. (b) Applicants for 48,000 shares (in respect of applications for 1,000 or more shares) were allotted 14,200 shares. (c) In respect of the remaining applicants, that is, for those who applied for 25,400 shares, allotment of 15,240 shares on pro-rata basis. Excess application money was adjusted against subsequent dues and the final surplus was returned. Shaun, to whom 300 shares were allotted on pro-rata basis failed to pay the allotment money. Naina who was allotted 450 shares on pro-rata basis did not pay the call money. Their shares were forfeited after the call was made. Five hundred of these shares were reissued to Shane at $ 9 per share (the whole of Shaun's shares being included). Show Journal Entries and Cash Book entries. Workings will form part of the answer.

S Ltd. issued 40,000 equity shares of $ 10 each at a premium of $ 2.50 each to the public. The amount was payable as to $ 2 on application, $ 4.50 on allotment (including premium) and $ 6 on call. Owing to heavy over subscription allotment was made as under: (a) Applicants for 23,000 shares (in respect of applications for 2,000 or more shares) were allotted 10,560. (b) Applicants for 48,000 shares (in respect of applications for 1,000 or more shares) were allotted 14,200 shares. (c) In respect of the remaining applicants, that is, for those who applied for 25,400 shares, allotment of 15,240 shares on pro-rata basis. Excess application money was adjusted against subsequent dues and the final surplus was returned. Shaun, to whom 300 shares were allotted on pro-rata basis failed to pay the allotment money. Naina who was allotted 450 shares on pro-rata basis did not pay the call money. Their shares were forfeited after the call was made. Five hundred of these shares were reissued to Shane at $ 9 per share (the whole of Shaun's shares being included). Show Journal Entries and Cash Book entries. Workings will form part of the answer.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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