Question

Roxy Ltd. issued Equity shares of 10 each payable as:

₹ 4 on Application and Allotment; ₹ 2 on First Call; ₹ 4 on Second and Final Call.
Following is an extract of the Journal of Roxy Ltd.

Journal of Roxy Ltd. (an extract)
Date	Particulars	L. F.	Dr. (₹)	Cr. (₹)
1.	Share First Call A/c   ...Dr.		28,000
	To Share Capital A/c			28,000
	(Being first call due on ___??___ shares @ ₹ 2 each)
2.	Bank A/c   ...Dr.		??
	Calls in arrears A/c   ...Dr.		2,000
	To Share First Call A/c			28,000
	(Being first call received on ___??___ shares)
3.	Share Capital A/c   ...Dr.		??
	To Shares Forfeited A/c			4,000
	To Calls in Arrears A/c			??
	(Being ___??___ shares of ₹ 10 each forfeited for non-payment of first call)
4.	Share Second & Final Call A/c   ...Dr.		52,000
	To Share capital A/c			52,000
	(Being second & final call due on ___??___ shares @ ₹ 4 each)
5.	Bank A/c   ...Dr.		??
	Calls in Arrears A/c   ...Dr.		10,000
	To Share Second & Final Call A/c			52,000
	(Being second call received on ___??___ shares)
6.	Share capital A/c   ...Dr.		??
	To Shares Forfeited A/c			??
	To Calls in Arrears A/c			10,000
	(Being ___??___ shares of ₹ 10 each forfeited for non payment of final call)
7.	Bank A/c   ...Dr.		??
	Share Forfeited A/c   ...Dr.		??
	To Share Capital A/c			??
	(Being 1,500 forfeited shares including those on which the first call was not received reissued @ ₹ 6 per shares fully called)
8.	Share Forfeiture A/c (1,000 × 0) + (500 × 2)   ...Dr.		??
	To Capital Reserve A/c			??
	(Being ___??___)

You are required to complete the journal entries by filling up the missing information represented by '??', including the number of shares and narration, if any.

Answer 1

Journal of Roxy Ltd.
Date	Particulars	L. F.	Dr. (₹)	Cr. (₹)
1.	Share First Call A/c (14,000 × 2)   ...Dr.		28,000
	To Share Capital A/c			28,000
	(Being first call due on 14,000 shares @ ₹ 2 each)
2.	Bank A/c (13,000 × 2)   ...Dr.		26,000
	Calls in arrears A/c (1,000 × 2)   ...Dr.		2,000
	To Share First Call A/c			28,000
	(Being first call received on 12,000 shares)
3.	Share Capital A/c (1,000 × 6)   ...Dr.		6,000
	To Shares Forfeited A/c (1,000 × 4)			4,000
	To Calls in Arrears A/c			2,000
	(Being 1000 shares of ₹ 10 each forfeited for non-payment of first call)
4.	Share Second & Final Call A/c (13,000 × 4)   ...Dr.		52,000
	To Share capital A/c			52,000
	(Being second & final call due on 13,000 shares @ ₹ 4 each)
5.	Bank A/c (10,500 × 4)   ...Dr.		42,000
	Calls in Arrears A/c (2,500 × 4)   ...Dr.		10,000
	To Share Second & Final Call A/c			52,000
	(Being second call received on 10,000 shares)
6.	Share capital A/c (2,500 × 10)   ...Dr.		25,000
	To Shares Forfeited A/c (2,500 × 6)			15,000
	To Calls in Arrears A/c (2,500 × 4)			10,000
	(Being 2,500 shares of ₹ 10 each forfeited for non payment of final call)
7.	Bank A/c (1,500 × 6)   ...Dr.		9,000
	Share Forfeited A/c (1,000 × 4) + (500 × 4)   ...Dr.		6,000
	To Share Capital A/c (1,500 × 10)			15,000
	(Being 1,500 forfeited shares including those on which the first call was not received reissued @ ₹ 6 per shares fully called)
8.	Share Forfeiture A/c (1,000 × 0) + (500 × 2)   ...Dr.		1,000
	To Capital Reserve A/c			1,000
	(Being excess amount of share forfeiture transferred to capital reserve)

Working Note:

1. Number of shares on which first call was due = `(28,000)/2` = 14,000 shares

2. First call was received on = `(26,000)/2` = 13,000 shares

3. Second and final call was due on = `(52,000)/4` = 13,000 shares

4. Second call received on = `(42,000)/4` = 10,500 shares

Calls in Arrear on = 13,000 − 10,500 = 2,500 shares

5. Number of shares forfeited on arrears on first call:

Shares Forfeited A/c = 24,000

Amount called up till first call = ₹ 6 per share

Amount received till first call = ₹ 4 per share

Shares forfeited = `(4,000)/4` = 1,000 shares

6. Number of shares forfeited of failure to pay final call

Calls in arrears = `(10,000)/4` = 2500 shares

7. Amount received on reissue of 1,500 shares = 1,500 × 6 = ₹ 9,000

Amount of reissue adjusted from shares forfeiture A/c = 15,000 − 9,000 = 6,000

8. Calculation of amount transferred to capital reserve:

Total profit on forfeiture of 1,500 shares = Profit on forfeited of

1,000 shares at first call time + Profit on forfeiture of 500 shares at

final call time

= 4,000 + `(15,000)/(2,500)` × 500 = 4,000 + 3,000 = 7,000

Amount adjusted on reissue of share = 6,000

Amount transferred to Capital Reserve = 7,000 − 6,000 = ₹ 1,000