Question

The Hindustan Manufacturing Ltd. had a total subscribed capital of ₹ 10,00,000 in Equity Shares of ₹ 10 each of which ₹ 7.50 were called-up. A final call of ₹ 2.50 was made and all amount paid except two calls of ₹ 2.50 each in respect  of 100 shares held by D . These shares were forfeited and reissued at ₹ 8 per share . 
Pass necessary journal entries (including that of cash) to record the transactions of final call , forfeiture of shares and reissue of forfeited shares . Also, prepare the Balance Sheet of the  company. 

Answer 1

Books of Hindustan Manufacturing Limited
Journal

Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	Equity Share Final Call A/c	Dr.		2,50,000
	To Equity Share Capital A/c				2,50,000
	(Share Final Call due on 1,00,000 shares at Rs 2.5 per share)
	Bank A/c	Dr.		2,49,750
	Calls-in-Arrears A/c	Dr.		250
	To Equity Share Final Call A/c				2,50,000
	(Share Final Call of Rs 2.5 per share received from 99,900 shares and 100 shares did not pay it)
	Equity Share Capital A/c	Dr.		1,000
	To Share Forfeiture A/c				500
	To Calls-in-Arrears A/c				500
	(100 shares of Rs 10 each forfeited for the non-payment of two calls of Rs 2.5 each)
	Bank A/c	Dr.		800
	Share Forfeiture A/c	Dr.		200
	To Equity Share Capital A/c				1,000
	(100 shares of Rs 10 each reissued at Rs 8 per share, fully paid-up)
	Share Forfeiture A/c	Dr.		300
	To Capital Reserve A/c				300
	(Balance in Share Forfeiture Account after re-issue of shares, transferred to Capital Reserve)

As per the Schedule III of Companies Act, 2013, the Company's Balance Sheet is presented as follows. 

Hindustan Manufacturing Ltd.
Balance Sheet

Particulars	Note No.	Amount  (Rs)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital	1	10,00,000
b. Reserves and Surplus	2	300
2. Non-Current Liabilities
3. Current Liabilities
Total		10,00,300
II. Assets
1. Non-Current Assets
2. Current Assets
a. Cash and Cash Equivalents	3	10,00,300
Total		10,00,300

NOTES TO ACCOUNTS 

Note No.	Particulars	Amount (Rs)
1	Share Capital
	Authorised Share Capital
	1,00,000 shares of Rs 10 each	10,00,000
	Issued Share Capital
	1,00,000 shares of Rs 10 each	10,00,000
	Subscribed, Called-up and Paid-up Share Capital
	1,00,000 shares of Rs 10 each	10,00,000
2	Reserves and Surplus
	Capital Reserve	300
3	Cash and Cash Equivalents
	Cash at Bank	10,00,300

Working Notes:

Share Forfeiture Credit (100 shares × Rs 5 each)	500
Less: Share Forfeiture Debit (100 share × Rs 2 each)	200	Loss on re-issue
Balance in Share Forfeiture Account after re-issue	300

Capital Reserve = Balance in Share Forfeiture Account after re-issue = Rs 300