Question

(Forfeiture of shares issued at premium)
The Century Ltd. issued 8,000 shares of Rs 100 at a premium of 10% payable as under-

On Application	Rs 25	On Allotment	Rs 40 (including premium)
On First Call	Rs 20	On Second Call	Rs 25

Company called up allotment and both the calls which were duly received except Ramesh to whom 500 shares were allotted failed to pay allotment and calls. Prepare Journal of Century Ltd.

Answer 1

                                   Books of Century Ltd
                                       Journal Entry

Date	Particulars	L.F.	Debit Amount (Rs.)	Credit Amount (Rs.)
	Bank A/c                                  Dr.      To Share Application A/c (Share application received on 8,000 shares of Rs 25 each)		200,000	200,000
	Share Application A/c              Dr.    To Share Capital A/c (Share application transferred to Share Capital A/c)		200,000	200,000
	Share Allotment A/c                 Dr.   To Share Capital A/c   To  Securities Premium A/c (Share allotment due on 8,000 shares of Rs 40 each including Premium of Rs 10 each)		320,000	240,000 80,000
	Bank A/c                               Dr. Calls-in-Arrears A/c              Dr.     To Share Allotment A/c  (Share allotment received)		300,000 20,000	320,000
	Share First Call A/c                Dr.    To Share Capital A/c (Share first call due on 8,000 shares of Rs 20 each)		150,000 10,000	160,000
	Share Final Call A/c               Dr.     To Share Capital A/c (Share final call due on 8,000 share of Rs. 25 each0		200,000	200,000
	Bank A/c                                Dr. Call- in - Arrears A/c              Dr.        To Share Final Call A/c (Share final call received on 7,500 shares of Rs 25 each)		187,000 12,500	200,000

Working Notes:
Calls-in-Arrears on Share Allotment = 500 x 40 = Rs. 20,000 (including premium of Rs.10)
Calls-in-Arrears on First Call = 500 x 20 = Rs.10,000
Calls-in-Arrears on Final Call = 500 x 25 = Rs. 12,500