Question

Alfa Ltd. issued 5,000 shares of ₹100 each at par. The amount payable was as under:

₹ 25 on application;
₹ 25 on allotment;
₹ 20 on first call; and
₹ 30 on final call.

The company did not make final call. X, a holder of 100 shares, failed to pay allotment and first call money. Directors forfeited his shares and immediately re-issued the forfeited shares at ₹ 6,500.

Pass Journal entries in the books of the company and prepare the Opening Balance Sheet.

Answer 1

Journal entries
In the books of Alfa Ltd.
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Bank A/c     ...Dr.		1,25,000
	To Share Application A/c			1,25,000
	(Being Application money received on 5,000 shares @ ₹ 25)
2.	Share Application A/c     ...Dr.		1,25,000
	To Share Capital A/c			1,25,000
	(Being Application money transferred to Share Capital)
3.	Share Allotment A/c     ...Dr.		1,25,000
	To Share Capital A/c			1,25,000
	(Being Allotment money due @ ₹ 25 on 5,000 shares)
4.	Bank A/c     ...Dr.		1,22,500
	Calls in Arrears A/c     ...Dr.		2,500
	To Share Allotment A/c			1,25,000
	(Being Allotment received except from X on 100 shares)
5.	Share First Call A/c     ...Dr.		1,00,000
	To Share Capital A/c			1,00,000
	(Being First call due @ ₹ 20 on 5,000 shares)
6.	Bank A/c     ...Dr.		98,000
	Calls in Arrears A/c     ...Dr.		2,000
	To Share First Call A/c			1,00,000
	(Being First call received except from X on 100 shares)
7.	Share Capital A/c     ...Dr.		7,000
	To Share Forfeiture A/c			2,500
	To Share allotment A/c			2,500
	To Calls in Arrears A/c			2,000
	(Being 100 shares forfeited for non-payment of allotment and first call)
8.	Bank A/c     ...Dr.		6,500
	Share Forfeiture A/c     ...Dr.		500
	To Share Capital A/c			7,000
	(Being 100 forfeited shares reissued at ₹ 65 each as fully paid)
9.	Share Forfeiture A/c     ...Dr.		2,000
	To Capital Reserve A/c			2,000
	(Being Profit on reissue of forfeited shares transferred to Capital Reserve)

Cash Book (Bank Column Only)

Date	Particulars	Amount (₹)
1.	To Share Application A/c	1,25,000
2.	To Share Allotment A/c	1,22,500
3.	To Share First Call A/c	98,000
4.	To Bank (Reissue of 100 shares)	6,500
	Total	₹ 3,52,000

 

Balance Sheet In the books of Alfa Ltd.
Liabilities	Amount (₹)	Assets	Amount (₹)
Share Capital
5,000 Equity Shares of ₹100 each	5,00,000	Bank Balance	3,52,000
Called-up: ₹70 per share	3,50,000
Capital Reserve	2,000
Total	3,52,000	Total	3,52,000