Question

A  company issued 10,000 shares of the value of  ₹ 10 each , payable  ₹ 3 on application, ₹ 3 on allotment and ₹ 4 on the first and final call . All amounts are duly received except the call money on 100 shares . These shares are subsequently forfeited by Directors and are resold as fully paid-up for ₹ 500 .
Give necessary journal entries for the transactions.

Answer 1

Journal

Date	Particulars		L.F.	Debit Amount  Rs	Credit Amount  Rs
	Bank A/c	Dr.		30,000
	To Share Application A/c				30,000
	(Share application money received for 10,000 shares at Rs 3 each)
	Share Application A/c	Dr.		30,000
	To Share Capital A/c				30,000
	(Share application money transferred to Share Capital)
	Share Allotment A/c	Dr.		30,000
	To Share Capital A/c				30,000
	(Allotment due on 10,000 shares at Rs 3 per shares)
	Bank A/c	Dr.		30,000
	To Share Allotment A/c				30,000
	(Share allotment money received)
	Share First and Final Call A/c	Dr.		40,000
	To Share Capital A/c				40,000
	(First and final call due on 10,000 shares at Rs 4 each)
	Bank A/c	Dr.		39,600
	Calls-in-Arrears A/c	Dr.		400
	To Share First and Final Call				40,000
	(First and final call of Rs 4 per share received on 9,900 shares, and 100 shares failed to pay it)
	Share Capital A/c	Dr.		1,000
	To Share Forfeiture A/c				600
	To Calls-in-Arrears A/c				400
	(100 shares of Rs 10 each forfeited for the non-payment of first and final call Rs 4 per share)
	Bank A/c	Dr.		500
	Share Forfeiture A/c	Dr.		500
	To Share Capital A/c				1,000
	(100 shares of Rs 10 each re-issued for the sum of Rs 500)
	Share Forfeiture A/c	Dr.		100
	To Capital Reserve A/c				100
	(Balance in Share Forfeiture Account after re-issue of shares, transferred to Capital Reserve Account)

Working Note

Share foefeiture Account (debit)               = 600
Less : Share Forfeiture Account (Credit)    = (500)
Balance in Share Forfeiture after re-issue  = 100  

Capital Reserve = Balance in share Forfeiture Account after re-issue = Rs 100.