Question

Give necessary journal entries:

(i) 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.

(ii) Virender Limited forfeited 20 shares of ₹ 100 each(₹ 60 called-up) issued at par to Mukesh on which he had paid ₹ 20 per share. Out of these, 15 shares were reissued to Sanjeev as ₹ 60 paid-up for ₹ 45 per share.

Answer 1

(i) Book of Devendra Limited

Journal
Date		Particulars		L.F.	Debit Amount (Rs.)	Credit Amount (Rs.)
2010
Jan. 01		Equity Share Capital A/c	Dr.		1,000
		To Share Forfeiture A/c				800
		To Calls-in-Arrears A/c				200
		(100 shares of Rs 10 each forfeited for the non-payment of Rs 2 per share)
Feb. 01		Bank A/c	Dr.		420
		Share Forfeiture A/c	Dr.		180
		To Equity Share Capital A/c				600
		(60 shares of Rs 10 each re-issued at Rs 7 per share, fully paid-up)
		Share Forfeiture A/c	Dr.		300
		To Capital Reserve A/c				300
		(Balance in Share Forfeiture Account of 60 shares after re-issue transferred to Capital Reserve)

Working Note:

Forfeiture of re-issued shares

Share Forfeiture per share Credit	= Rs. 8
Share Forfeiture per share Debit	= Rs. 3
Balance in Share Forfeiture after re-issue per share	= Rs. 5

Capital Reserve = Balance in Share Forfeiture after re-issue (per share) × No. of shares reissued

= Rs. 5 × 60 = Rs. 300

(ii) In the books of Virender Ltd.

Journal
Date	Particulars	L.F.	Debit (Rs.)	Credit (Rs.)
	Share Capital A/c                          Dr.		1200
	To Share Forfeiture A/c			400
	To Calls-in-Arrears A/c			800
	(Being 20 Shares of 100 each Rs. 60 Called-up forfeited for the non-payment of Rs. 40 per share.)
	Bank A/c                                        Dr.		675
	Share Forfeiture A/c                      Dr.		225
	To Share Capital A/c			900
	(Being 15 shares of 100 each re-issued at Rs. 45 per share, Rs. 60 fully paid up.)
	Share Forfeiture A/c                      Dr.		75
	To Capital Reserve A/c			75
	(Being balance in the share forfeiture account of 15 shares after re-issue transferred to capital reserve.)

Working Note:

Capital Reserve

Forfeiture of re-issued shares

Share Forfeiture per share Cr. (at the time of forfeiture)	= Rs. 8
Share Forfeiture per share Dr. (at the time of re-issue)	= Rs. 3
Balance in Share Forfeiture after re-issue per share	= Rs. 5

Capital Reserve = Balance in Share Forfeiture after re-issue (per share) × No. of shares reissued

= Rs. 5 × 15 = Rs. 75