Question

X Ltd., forfeited 1,000 shares of ₹20 each issued at a premium of ₹2 per share to Ashok (₹18 called-up) on which he did not pay allotment of ₹6 (including premium) and Ist Call of ₹4. Give Journal Entries for forfeiture and re-issue in the following cases:

1. 600 shares were re-issued to Mohan at ₹14 per share as ₹18 paid up;
2. 200 shares to Sohan as fully paid-up for ₹24 per share; and
3. 200 shares to Suresh as fully paid-up for ₹10 per share at different intervals of time.

Answer 1

Journal entries In the books of X Ltd.
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Share Capital A/c (1000 × 18)     ...Dr.		18,000
	To Share Allotment A/c (₹4 × 1,000)			4,000
	To Share First Call A/c (₹4 × 1,000)			4,000
	To Share Forfeiture A/c (₹10 × 1,000)			10,000
	(Being 1,000 shares forfeited for non-payment of allotment and first call)
2.	Bank A/c (600 × 14)     ...Dr.		8,400
	Share Forfeiture A/c Dr. (₹6 × 600)     ...Dr.		3,600
	To Share Capital A/c (₹18 × 600)			10,800
	(Being 600 shares reissued to Mohan at ₹14, ₹18 paid-up)
3.	Share Forfeiture A/c Dr. (₹4 × 600)     ...Dr.		2,400
	To Capital Reserve A/c			2,400
	(Being profit on reissue transferred to Capital Reserve)
4.	Bank A/c Dr. (₹24 × 200)     ...Dr.		4,800
	To Share Capital A/c (₹20 × 200)			4,000
	To Securities Premium A/c (₹4 × 200)			800
	(Being 200 shares reissued at ₹24 fully paid-up)
5.	Share Forfeiture A/c Dr. (₹10 × 200)     ...Dr.		2,000
	To Capital Reserve A/c			2,000
	(Being profit on reissue transferred to Capital Reserve)
6.	Bank A/c Dr. (₹10 × 200)     ...Dr.		2,000
	Share Forfeiture A/c Dr. (₹10 × 200)     ...Dr.		2,000
	To Share Capital A/c (₹20 × 200)			4,000
	(Being 200 shares reissued at ₹10 fully paid-up)

Working notes:

Particulars	Amount
Called-up Amount	₹18
Amount Unpaid:
- Allotment	₹6 (₹4 capital + ₹2 premium)
- First Call	₹4
Amount Paid	₹18 − ₹6 − ₹4 = ₹8
Forfeited (Paid)	₹8 per share
Total Forfeited	₹8 × 1,000 = ₹8,000