Question

Vaibhav Ltd. issued 20,000 equity shares of ₹100 each at ₹250 payable as follows:

	₹
On Application	100 (including premium ₹60)
On Allotment	50 (including premium ₹30)
On First Call	70 (including premium ₹40)
On Second & Final Call	30 (including premium ₹20)

All amounts were received except first and second & final call on 750 shares held by Mr. Akash. His shares were forfeited and 2/3rd of these shares were reissued to Mr. Dinesh at ₹200 per share. Pass entries for forfeiture and reissue.

Answer 1

Journal entries In the books of Vaibhav Ltd.
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Equity Share Capital A/c     ...Dr.		75,000
	Securities Premium A/c     ...Dr.		15,000
	To Share Forfeiture A/c			1,12,500
	To Calls in Arrears A/c			22,500
	To Securities Premium A/c			15,000
	(Being 750 equity shares forfeited for non-payment of first & second call; ₹150 received, ₹100 unpaid including premium)
2.	Bank A/c     ...Dr.		1,00,000
	To Equity Share Capital A/c			50,000
	(Being 500 forfeited shares reissued to Mr. Dinesh @ ₹200 per share fully paid up, including ₹100 premium)
3.	Share Forfeiture A/c     ...Dr.		30,000
	To Capital Reserve A/c			30,000
	(Being profit on reissue of 500 forfeited shares transferred to Capital Reserve)

Working Notes:

1) Amount received on 750 shares before forfeiture:
Application (₹100 including ₹60 premium) = ₹100
Allotment (₹50 including ₹30 premium) = ₹50
Total received per share = ₹150
Total received on 750 shares = ₹150 × 750 = ₹1,12,500

2) Reissue:
2/3 of 750 = 500 shares reissued
At ₹200 per share
Capital ₹100 + Premium ₹100
No discount = entire forfeited amount on reissued shares = profit

3) Capital Reserve:
Paid-up capital (before forfeiture) per share = ₹60 (₹40 app + ₹20 allot)
On 500 shares = ₹30,000
Capital Reserve = ₹30,000