Question

Subhash Company Limited issues 2000 Equity shares of ₹100 each payable as ₹ 30 on application, ₹ 30 on allotment, ₹ 40 on first and final call. All the shares were subscribed and duly allotted. Company made all the calls. All cash was duly received except the first & final call on 100 equity shares. These shares were forfeited by company and were re-issued as fully paid for ₹75 per share.

Show the Journal entries in the books of Subhash Company Ltd.

Answer 1

Journal Entries in the books of Anand Company Limited
Date	Particulars	L.F	Debit Amount (₹)	Credit Amount (₹)
1	Bank A/c Dr.		60,000
	To Equity Share Application A/c			60,000
	(Being application money on 2,000 equity shares @ ₹ 30 per share received)
2	Equity Share Application A/c Dr		60,000
	To Equity Share Capital A/c			60,000
	(Being application money received on 2,000 equity shares transferred to equity share capital)
3	Equity Share Allotment A/c Dr.		60,000
	To Equity Share Capital A/c			60,000
	(Being equity share allotment money on 2,000 shares @ ₹ 30 per share due)
4	Bank A/c Dr		60,000
	To Equity Share Allotment A/c			60,000
	(Being equity share allotment money on 2,000 shares @ ₹ 30 per share received)
5	Equity Share First and Final Calls A/c Dr.		80,000
	To Equity Share Capital A/c			80,000
	(Being equity share first and final call money on 2,000 shares @ ₹ 40 per share due)
6	Bank A/c Dr.		76,000
	To Equity Share First and Final Call A/c			76,000
	(Being equity share first and final call money on 1900 shares @ ₹ 40 per share received)
7	Equity Share Capital A/c Dr.		10,000
	To Equity Share First and Final Call A/c			4,000
	To Equity Share Forfeiture A/c			6,000
	( Being forfeiture of 100 shares due to non-payment of first and final call)
8	Bank A/c Dr		7,500
	Equity Share Forfeiture A/c Dr		2,500
	To Equity Share Capital A/c			10,000
	(Being re-issue of 100 forfeited shares @ ₹ 75 per share)
9	Equity Share Forfeiture A/c Dr		3,500
	To Capital Reserve A/c			3,500
	(Being balance of Share Forfeiture A/c transferred to Capital Reserve A/c)
			419500	419500

Working Notes :

(1) Amount forfeited by the company on 100 shares forfeited = 100 × (30 + 30) = 100 × 60 = ₹ 6,000

(2) Calls-in-Arrears = 100 × 40 = ₹ 4,000.

(3) Amount received on re-issue of 100 forfeited shares = 100 × 75 = ₹ 7,500. Balance of ₹ 2,500 (i.e. loss 25 × 100) is transferred to Share Forfeiture A/c.

(4) Amount transfer from Share Forfeiture A/c to Capital Reserve is ascertained by preparing Share Forfeiture A/c.

Share Forfeiture A/c
Date	Particulars	J.F	Amount (₹ )	Date	Particulars	J.F	Amount (₹ )
8	To Equity Share Capital A/c		2,500	7	By Equity Share Capital A/c		6,000
9	To Capital Reserve A/c (Balancing figure)		3,500
			6,000				6,000