Question

A holds 100 shares of ₹ 10 each on which he has paid ₹ 1 per share on application.
B holds 200 shares of ₹ 10 each on which he has paid ₹ 1 and ₹ 2 per share on application and allotment respectively.
C holds 300 shares of ₹ 10 each and has paid ₹ 1 on application, ₹ 2 on allotment and ₹ 3 on first call. They all fail to pay their arrears and the second call of ₹ 2 per share . Shares are forfeited and subsequently reissued @ ₹ 11 per share as fully paid-up.
journalise the above. 

Answer 1

Application	Rs	1
Allotment	Rs	2
First Call	Rs	3
Second Call	Rs	2
	Rs	8	Called-up

Journal Entries

Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	Forfeiture of Shares
	Shares of A
	Share Capital A/c	Dr.		800
	To Share Forfeiture A/c				100
	To Calls-In-Arrears A/c				700
	(100 shares of Rs 10 each, Rs 8 called-up, held by A forfeited for the non-payment of Rs 7 per share)
	Shares of B
	Share Capital A/c	Dr.		1,600
	To Share Forfeiture A/c				600
	To Calls-in-Arrears A/c				1,000
	(200 shares of Rs 10 each, Rs 8 called-up, held by B forfeited for non-payment of Rs 5 per share)
	Shares of C
	Share Capital A/c	Dr.		2,400
	To Share Forfeiture A/c				1,800
	To Calls-in-Arrears A/c				600
	(300 shares of Rs 10 each, Rs 8 called-up held by C forfeited for the non-payment of Rs 2 per share)
	Re-issue of shares
	Bank A/c	Dr.		6,600
	To Share Capital A/c				6,000
	To Securities Premium A/c				600
	(600 shares of Rs 10 each re-issued at Rs 11 per share fully paid-up)
	Share Forfeiture A/c	Dr.		2,500
	To Capital Reserve A/c				2,500
	(Share Forfeiture transferred to Capital Reserve)

Working Note:

Share Forfeiture of 100 shares held by A	Rs	100	Cr.
Share Forfeiture of 200 shares held by B	Rs	600	Cr.
Share Forfeiture of 300 shares held by C	Rs	1,800	Cr.
Total Share Forfeiture credit (at the time of cancellation of shares)	Rs	2,500

Calculation of Capital Reserve

Total Share Forfeiture (at the time of cancellation of shares) = Rs 2,500 Cr.

Less: Total Share Forfeiture (at the time of re-issue of shares) = (NIL) Dr.

Capital Reserve =Rs 2,500