Goofy Ltd was incorporated on 1 July 2016 and issued a prospectus inviting applications for 500,000 ordinary shares at an issue price of $10. The shares are payable are follows: -
The transactions for the period were as follows:
31 August 2016: Applications were received for 580.000 shares.
3 September 2016: Applications. 80,000 were rejected by the directors and the application money was returned to the shareholders concerned.
4 September 2016: The Company allotted 500.000 shares to the remaining applicants.
25 September 2016: All the allotment money was received. 30 September 2016: The call was made on the shares. payable by
31 October 2016. 31 october 2016: Call money was received from the shareholders of only 460.000 shares. 31 December 2016: The remaining 40,000 shares were forfeited. The forfeited shares were offered to an investment company at a price of $8.50 per share paid to$10 and the transfer was completed on 31 March 2017. The costs of reissue amounted to $1,800.
The company's constitution states that any forfeited shares must be refunded to the shareholders.
30 April 2017: These shareholders received a refund for the amount owed to them.
Required: Prepare the general journal entries in the books of Goofy Ltd to record the above transactions. Provide narrations for all your entries.
Q.2.
1)
Journal Entries in the books of Goofy Ltd.
| Date | Particulars | L.F. | Debit ($) | Credit ($) |
| 08/31/2016 | Bank A/c Dr. To Share Application A/c | 2,900,000 | 2,900,000 | |
| 09/03/2016 | Share Application A/c Dr. To Bank A/c | 400,000 | 400,000 | |
| 09/04/2016 | Share Application and Allotment A/c Dr. To Share Capital A/c | 2,500,000 | 2,500,000 | |
| 09/25/2016 | Bank A/c Dr. To Share Allotment A/c | 1,500,000 | 1,500,000 | |
| 09/25/2016 | Share Allotment A/c Dr. To Share Capital A/c | 1,500,000 | 1,500,000 | |
| 09/30/2016 | Share Final Call A/c Dr. To Share Capital A/c | 1,000,000 | 1,000,000 | |
| 10/31/2016 | Bank A/c Dr. To Share Final Call A/c | 920,000 | 920,000 | |
| 12/31/2016 | Share Capital A/c [40,000*10] Dr. To Share Final Call A/c [40,000*2] To Forfeited Shares A/c [40,000*8] | 400,000 | 80,000 320,000 | |
| 03/31/2017 | Bank A/c Dr. Discount on Shares A/c Dr. To Share Capital A/c | 340,000 60,000 | 400,000 | |
| 03/31/2017 | Cost of reissue A/c Dr. To Bank A/c | 1,800 | 1,800 | |
| 03/31/2017 | Capital Reserve Dr. To Discount on reissue A/c To Cost on reissue A/c (Being loss on reissue transferred to Capital Reserve) | 61,800 | 60,000 1,800 | |
| 04/30/2017 | Forfeited Shares A/c Dr. To Bank A/c (Being the amount forfeited refunded to the shareholders) | 320,000 | 320,000 |
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