Question

Naman Ltd issued 20,000 shares of Rs 100 each, payable Rs 25 on application, Rs 30 on allotment, Rs 25 on first call and the balance on final call. All money duly received except Anubha, who, holding 200 shares, did not pay allotment and call money, and Kumkum, who, holding 100 shares, did not pay both calls. The directors forfeited shares of Anubha and Kumkum.

Give journal entries.

Answer 1

Journal Entries in the books of Naman Ltd.
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Bank A/c   ...Dr.		5,00,000	-
	To Share Application A/c		-	5,00,000
	(Shares Application money received for 20,000 shares @ Rs 25 each)
2.	Share Application A/c   ...Dr.		5,00,000	-
	To Share Capital A/c		-	5,00,000
	(Share Application money of 20,000 shares @ Rs 25 each transferred to Share Capital Account)
3.	Share Allotment A/c   ...Dr.		6,00,000	-
	To Share Capital A/c		-	6,00,000
	(Share Allotment due on 20,000 shares @ Rs 30 each)
4.	Bank A/c   ....Dr.		5,94,000	-
	To Share Allotment A/c		-	5,94,000
	(Allotment money received for 19,800 shares @ Rs 30 per share)
5.	Share First Call A/c   ...Dr.		5,00,000	-
	To Share Capital A/c			5,00,000
	(Share First Call money due on 20,000 @ Rs 25 per share)
6.	Bank A/c   ...Dr.		4,92,500	-
	To Share First Call A/c		-	4,92,500
	(Share First Call received @ Rs 25 per share for 19,700 shares)
7.	Share Final Call A/c   ...Dr.		4,00,000	-
	To Share Capital A/c		-	4,00,000
	(Share Final Call money due on 20,000 shares @ 20 per share)
8.	Bank A/c   ...Dr.		3,94,000	-
	To Share final call A/c		-	3,94,000
	(Share Final Call received @ Rs 20 per Share  for 19,700 shares, and 300 shares failed to pay the call)
9.	Share Capital A/c   ...Dr.		30,000	-
	To Share Forfeiture A/c (200 × 25 + 100 × 55)		-	10,500
	To Share Allotment (200 × 30)		-	6,000
	To Share First Call A/c (300 × 25)		-	7,500
	To Share Final Call A/c (300 × 20)		-	6,000
	(300 shares of Anubha and Kumkum forfeited due to non-payment of calls)

Working Note:

Share Forfeited Amount:

Received application money on (200 + 100)

Shares @ 25 each = 7,500

Received allotment money on 100 shares @ 30 each = 3,000

= 7,500 + 3,000

= 10,500

Answer 2

Alternatively, this question can be solved by debiting the Calls in Arrears Account.

Journal Entries in the books of Naman Ltd.
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Bank A/c   ...Dr.		5,00,000	-
	To Share Application A/c		-	5,00,000
	(Shares Application money received for 20,000 shares @ Rs 25 each)
2.	Share Application A/c   ...Dr.		5,00,000	-
	To Share Capital A/c		-	5,00,000
	(Share Application money of 20,000 shares @ Rs 25 each transferred to Share Capital Account)
3.	Share Allotment A/c   ...Dr.		6,00,000	-
	To Share Capital A/c		-	6,00,000
	(Share Allotment due on 20,000 shares @ Rs 30 each)
4.	Bank A/c   ....Dr.		5,94,000	-
	Calls in Arrears A/c   ...Dr.		6,000	-
	To Share Allotment A/c		-	6,00,000
	(Allotment money received for 19,800 shares @ Rs 30 per share, and 200 shares failed to pay the Allotment)
5.	Share First Call A/c   ...Dr.		5,00,000	-
	To Share Capital A/c			5,00,000
	(Share First Call money due on 20,000 @ Rs 25 per share)
6.	Bank A/c   ...Dr.		4,92,500	-
	Calls in Arrears A/c   ...Dr.		7,500	-
	To Share First Call A/c		-	5,00,000
	(Share First Call money for 19,700 shares @ Rs 25 each received except 300 shares)
7.	Share Final Call A/c   ...Dr.		4,00,000	-
	To Share Capital A/c		-	4,00,000
	(Share Final Call money due on 20,000 shares @ 20 per share)
8.	Bank A/c   ...Dr.		3,94,000	-
	Calls in Arrears A/c   ...Dr.		6,000	-
	To Share final call A/c		-	4,00,000
	(Share Final Call money received for 19,700 shares @ Rs 20 per share, except 300 shares)
9.	Share Capital A/c   ...Dr.		30,000	-
	To Share Forfeiture A/c (200 × 25 + 100 × 55)		-	10,500
	To Calls in Arrears A/c		-	19,500
	(300 shares forfeited for failing to pay the amount due)

Working Note:

1. Share Forfeited Amount:

Received application money on (200 + 100)

Shares @ 25 each = 7,500

Received allotment money on 100 shares @ 30 each = 3,000

= 7,500 + 3,000

= 10,500

2. Calls - in arrears:

On Allotments = 6,000

On First Call = 7,500

On Final Call = 6,000

Calls in arrears = 6,000 + 7,500 + 6,000

= 19,500