Kochi Silk Ltd. issued a prospectus inviting applications for 40,000 shares of ₹ 10 each at a premium of ₹ 8 per share, payable as follows:

Kochi Silk Ltd. issued a prospectus inviting applications for 40,000 shares of ₹ 10 each at a premium of ₹ 8 per share, payable as follows:

On Application	₹ 6 (including ₹ 2 premium)
On Allotment	₹ 6 (including ₹ 2 premium)
On First Call	₹ 3 (including ₹ 2 premium)
On second & Final Call	₹ 3 (including ₹ 2 premium)

Applications were received for 80,000 shares and pro-rata allotment was made on the applications for 70,000 shares. It was decided to utilise excess application money towards the sums due on allotment. X, to whom 1,200 shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the first call his shares were forfeited. Y, who applied for 3,500 shares failed to pay the two calls and on his such failure, his shares were also forfeited. Of the shares forfeited, 2,500 shares were reissued as fully paid up for ₹ 9 per share, the whole of Y’s shares being included. Prepare Cash Book and Journal entries. [Ans. Cash at Bank ₹ 7,21,500; Net amount received on allotment ₹ 58,200; Capital Reserve ₹ 17,500.]