Question

Journalise the following:

Y Ltd. forfeited 700 shares of ₹100 each, issued at a premium of ₹5 per share for non-payment of allotment money of ₹35 per share (including premium) and first call of ₹20 per share. The second and final call of ₹20 has not yet been called. 500 of these shares were re-issued as ₹80 paid-up for ₹92 per share.

Answer 1

Journal entries In the books of Y Ltd.
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Share Capital A/c     ...Dr.		56,000
	To Share Allotment A/c			17,500
	To Share First Call A/c			14,000
	To Share Forfeiture A/c			24,500
	(Being 700 shares forfeited for non-payment of allotment and first call; premium included in allotment)
2.	Bank A/c     ...Dr.		46,000
	To Share Capital A/c			40,000
	To Securities Premium Reserve A/c			6,000
	(Being 500 shares reissued at ₹92 each, ₹80 paid-up including ₹4 premium)
3.	Share Forfeiture A/c     ...Dr.		15,000
	To Capital Reserve A/c			15,000
	(Being profit on reissue of 500 shares transferred to Capital Reserve)

Working Notes:

1) Called-up capital at forfeiture = ₹80 per share
₹80 × 700 = ₹56,000 debited to Share Capital

2) Unpaid:
Allotment = ₹35 × 700 = ₹24,500 (including ₹5 premium × 700 = ₹3,500)
First Call = ₹20 × 700 = ₹14,000
→ Total unpaid = ₹38,500

3) Amount received = ₹25 (on application) × 700 = ₹17,500
→ Credited to Share Forfeiture A/c

4) Reissued:
500 shares at ₹92 each = ₹46,000 banked
₹80 paid-up + ₹12 premium = Capital ₹80, Premium ₹12 – but only ₹6 is excess
→ ₹6 goes to Securities Premium
→ Capital = ₹80 × 500 = ₹40,000
→ Premium = ₹6 × 500 = ₹3,000 (correction from earlier logic)
→ Hence, revised Securities Premium = ₹3,000, not ₹6,000.