Issues of Shares II:Calls in Arrears, Calls in Advance, Forfeiture and Re-issue of Shares

CONTENT:

1. Preparation of issue of shares with share premium
2. Calls in arrears
3. Calls in advance
4. Forfeiture of shares
5. Re-issue of shares

Illustration 1.

Kalat Ltd. Issued 200,000 ordinary shares of N1.00 each at N1.20 per share payable as follows:

25k per share on application

40k per share on Allotment (including premium)

35k per share on first call

20k per share on second and final call.

Show the ledger accounts to record the above transactions.

Solution                                  

Kalat Ltd.

Bank Account

Application & Allotment Account

Premium Account   

1^st Call Account

2^nd Call Account

Share Capital Account

Illustration 2.

Chukwu Plc, has an authorized share capital of 1,000,000 Ordinary Shares of N20 per share. On 1^st July 1997, it issued 800,000 shares at a price of N20 per share payable as follows:

On Application      N10

On Application      N6

On Allotment         N2

On 1^st Call               N2

Applications were received for 1,000,000 shares, of these, 100,000 were rejected and the money refunded to the applicants.