Question

Give necessary journal entries:

The Directors of Devendra Ltd. resolved on 1^st January 2010 that Equity Shares of ₹ 10 each, ₹ 8 paid-up be forfeited for non-payment of final call of ₹ 2. On 1^st February, 60 of these shares were reissued @ ₹ 7 per share as fully paid-up.

Answer 1

Journal Entries
Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
1.	Share Capital A/c   ...Dr.		1,000
	To Shares Final Call A/c			200
	To Share Forfeiture A/c			800
	(100 shares forfeited for non-payment of Final Call of ₹ 2 per share)
2.	Bank A/c   ...Dr.		420
	Share Forfeiture A/c   ...Dr.		180
	To Share Capital A/c			600
	(60 forfeited shares reissued @ ₹ 7 per share as fully paid-up)
3.	Share Forfeiture A/c   ...Dr.		300
	To Capital Reserve A/c			300
	(Gain on reissue transferred to Capital Reserve)

Working Note:

100 Equity Shares of ₹ 10 each, ₹ 8 paid-up, were forfeited.

Amount forfeited:

100 × ₹ 8 = ₹ 800

60 shares were reissued @ ₹ 7 per share as fully paid-up.

Cash received:

60 × ₹ 7 = ₹ 420

Share Capital credited:

60 × ₹ 10 = ₹ 600

Discount on reissue:

₹ 600 − ₹ 420 = ₹ 180

Forfeited amount relating to 60 shares:

`800 xx 60/100 = 480`

Capital Reserve:

₹ 480 − ₹ 180 = ₹ 300