Question

Journalise the following:

A holds 100 shares of Rs. 10 each on which he has paid Re. 1 per share on application. B holds 200 shares of Rs. 10 each on which he has paid Re. 1 on application Rs. 2 on allotment. C holds 300 shares of Rs. 10 each, which have paid Re.1 on applications, Rs. 2 on allotment and Rs. 3 on the first call. They all failed to pay their arrears and the second call of Rs. 4 per share as well. All the shares of A, B and C were forfeited and subsequently reissued at Rs. 11 per share as fully paid up.

Answer 1

Journal Entries
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Share Capital A/c   ...Dr.		6,000	-
	To Calls-in-Arrears A/c		-	3,500
	To Share Forfeiture A/c		-	2,500
	(Being 600 shares of A, B, and C forfeited for non-payment of arrears)
2.	Bank A/c   ...Dr.		6,600	-
	To Share Capital A/c		-	6,000
	To Securities Premium A/c		-	600
	(Being 600 forfeited shares reissued at Rs. 11 per share as fully paid-up)
3.	Share Forfeiture A/c   ...Dr.		2,500	-
	To Capital Reserve A/c		-	2,500
	(Being the entire balance in the share forfeiture account transferred to capital reserve)

Working Note:

Calculation of Forfeited Amount (Amount Paid):

A = 100 ×  Rs. 1

= Rs. 100

B = 200 ×  Rs. 1 + Rs. 2

= Rs. 600

B = 200 ×  Rs. 1 + Rs. 2 + Rs. 3

= Rs. 1,800

Total Amount Forfeited = 100 + 600 + 1,800

= Rs. 2,500

Total Shares Forfeited = 100 + 200 + 300

= 600 Shares

Total Called-up Capital = 600 Shares × Rs. 10

= Rs. 6,000

Total Calls-in-Arrear = 6,000 − 2,500

= Rs. 3,500

Reissue Amount = 600 Shares × Rs. 11

= Rs. 6,600

Securities Premium Collected = 600 Shares × Rs. 1

= Rs. 600