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Question
A holds 100 shares of ₹ 10 each on which he has paid ₹ 1 per share on application.
B holds 200 shares of ₹ 10 each on which he has paid ₹ 1 and ₹ 2 per share on application and allotment respectively.
C holds 300 shares of ₹ 10 each and has paid ₹ 1 on application, ₹ 2 on allotment and ₹ 3 on first call. They all fail to pay their arrears and the second call of ₹ 2 per share . Shares are forfeited and subsequently reissued @ ₹ 11 per share as fully paid-up.
journalise the above.
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Solution
|
Application |
Rs |
1 |
|
|
Allotment |
Rs |
2 |
|
|
First Call |
Rs |
3 |
|
|
Second Call |
Rs |
2 |
|
|
|
Rs |
8 |
Called-up |
Journal Entries
|
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
|
Forfeiture of Shares |
|
|
|
|
|
|
Shares of A |
|
|
|
|
|
|
Share Capital A/c |
Dr. |
|
800 |
|
|
|
To Share Forfeiture A/c |
|
|
100 |
|
|
|
To Calls-In-Arrears A/c |
|
|
700 |
|
|
|
(100 shares of Rs 10 each, Rs 8 called-up, held by A forfeited for the non-payment of Rs 7 per share) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares of B |
|
|
|
|
|
|
Share Capital A/c |
Dr. |
|
1,600 |
|
|
|
To Share Forfeiture A/c |
|
|
600 |
|
|
|
To Calls-in-Arrears A/c |
|
|
1,000 |
|
|
|
(200 shares of Rs 10 each, Rs 8 called-up, held by B forfeited for non-payment of Rs 5 per share) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares of C |
|
|
|
|
|
|
Share Capital A/c |
Dr. |
|
2,400 |
|
|
|
To Share Forfeiture A/c |
|
|
1,800 |
|
|
|
To Calls-in-Arrears A/c |
|
|
600 |
|
|
|
(300 shares of Rs 10 each, Rs 8 called-up held by C forfeited for the non-payment of Rs 2 per share) |
|
|
|
|
|
|
Re-issue of shares |
|
|
|
|
|
|
Bank A/c |
Dr. |
|
6,600 |
|
|
|
To Share Capital A/c |
|
|
6,000 |
|
|
|
To Securities Premium A/c |
|
|
600 |
|
|
|
(600 shares of Rs 10 each re-issued at Rs 11 per share fully paid-up) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Forfeiture A/c |
Dr. |
|
2,500 |
|
|
|
To Capital Reserve A/c |
|
|
2,500 |
|
|
|
(Share Forfeiture transferred to Capital Reserve) |
|
|
|
|
Working Note:
|
Share Forfeiture of 100 shares held by A |
Rs |
100 |
Cr. |
|
Share Forfeiture of 200 shares held by B |
Rs |
600 |
Cr. |
|
Share Forfeiture of 300 shares held by C |
Rs |
1,800 |
Cr. |
|
Total Share Forfeiture credit (at the time of cancellation of shares) |
Rs |
2,500 |
|
Calculation of Capital Reserve
Total Share Forfeiture (at the time of cancellation of shares) = Rs 2,500 Cr.
Less: Total Share Forfeiture (at the time of re-issue of shares) = (NIL) Dr.
Capital Reserve =Rs 2,500
