Alfa Ltd. invited applications for issuing 75,000 equity shares of Rs

1.	Alfa Ltd. invited applications for issuing 75,000 equity shares of Rs 10 each. The amount was payable as follows: On Application and AllotmentRs 4 per shareOn First CallRs 3 per shareOn Second and Final CallBalance Applications for 1,00,000 shares were received. Shares were allotted to all the applicants on pro-rata basis and excess money received with applications was transferred towards sums due on first call. Vibha who was allotted 750 shares failed to pay the first call. Her shares were immediately forfeited. Afterwards the second call was made.The amount due on second call was also received except on 1,000 shares applied by Monika. Her shares were also forfeited. All the forfeited shares were re-issued to Mohit for Rs 9,000 as fully paid up. (a) Pass necessary journal entries in the books of Alfa LTd. for the above transactions. (b) Which value has been followed by the Company while making allotment of shares?
Answer» Alfa Ltd. invited applications for issuing 75,000 equity shares of Rs 10 each. The amount was payable as follows: $\begin{matrix} On Application and Allotment & Rs 4 per share On First Call & Rs 3 per share On Second and Final Call & Balance \end{matrix}$ Applications for 1,00,000 shares were received. Shares were allotted to all the applicants on pro-rata basis and excess money received with applications was transferred towards sums due on first call. Vibha who was allotted 750 shares failed to pay the first call. Her shares were immediately forfeited. Afterwards the second call was made.The amount due on second call was also received except on 1,000 shares applied by Monika. Her shares were also forfeited. All the forfeited shares were re-issued to Mohit for Rs 9,000 as fully paid up. (a) Pass necessary journal entries in the books of Alfa LTd. for the above transactions. (b) Which value has been followed by the Company while making allotment of shares?

Alfa Ltd. invited applications for issuing 75,000 equity shares of Rs 10 each. The amount was payable as follows: On Application and AllotmentRs 4 per shareOn First CallRs 3 per shareOn Second and Final CallBalance Applications for 1,00,000 shares were received. Shares were allotted to all the applicants on pro-rata basis and excess money received with applications was transferred towards sums due on first call. Vibha who was allotted 750 shares failed to pay the first call. Her shares were immediately forfeited. Afterwards the second call was made.The amount due on second call was also received except on 1,000 shares applied by Monika. Her shares were also forfeited. All the forfeited shares were re-issued to Mohit for Rs 9,000 as fully paid up. (a) Pass necessary journal entries in the books of Alfa LTd. for the above transactions. (b) Which value has been followed by the Company while making allotment of shares?

Answer»

Alfa Ltd. invited applications for issuing 75,000 equity shares of Rs 10 each. The amount was payable as follows:

$\begin{matrix} On Application and Allotment & Rs 4 per share On First Call & Rs 3 per share On Second and Final Call & Balance \end{matrix}$

Applications for 1,00,000 shares were received. Shares were allotted to all the applicants on pro-rata basis and excess money received with applications was transferred towards sums due on first call. Vibha who was allotted 750 shares failed to pay the first call. Her shares were immediately forfeited. Afterwards the second call was made.The amount due on second call was also received except on 1,000 shares applied by Monika. Her shares were also forfeited. All the forfeited shares were re-issued to Mohit for Rs 9,000 as fully paid up.

(a) Pass necessary journal entries in the books of Alfa LTd. for the above transactions.

(b) Which value has been followed by the Company while making allotment of shares?

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