Question

Arushi Computers Ltd. issued 10,000 equity shares of Rs. 100 each at 10% premium. The net amount payable as follows:

On application	Rs. 20
On allotment	Rs. 50 (Rs. 40 + premium Rs. 10)
On first call	Rs. 30
On final call	Rs. 10

A shareholder holding 200 shares did not pay final call. His shares were forfeited. Out of these 150 shares were reissued to Ms. Sonia at Rs. 75 per share.  Give journal entries in the books of the company.

Answer 1

Books of Arushi Computers Ltd.

 

Date	Particulars			L.F.	Debit Amount (₹)	Credit Amount (₹)
	Bank A/c		Dr.		2,00,000
		To Share Application A/c				2,00,000
	(Share Application money received for 10,000 shares @ ₹20 per share)
	Share Application A/c		Dr.		2,00,000
		To Share Capital A/c				2,00,000
	(Share Application money for 10,000 shares transferred to Share Capital Account)
	Share Allotment A/c		Dr.		5,00,000
		To Share Capital A/c				4,00,000
		To Securities Premium Reserve A/c				1,00,000
	(Allotment money due on 10,000 shares @ ₹40 per share excluding premium ₹10)
	Bank A/c		Dr.		5,00,000
		To Share Allotment A/c				5,00,000
	(Share Allotment money received for 10,000 shares @ ₹50 per share)
	Share First Call A/c		Dr.		3,00,000
		To Share Capital A/c				3,00,000
	(Share First Call money due on 10,000 shares @ ₹30 per share)
	Bank A/c		Dr.		3,00,000
		To Share First Call A/c				3,00,000
	(First Call money received for 10,000 shares @ ₹30 per share)
	Share Final Call A/c		Dr.		1,00,000
		To Share Capital A/c				1,00,000
	(Final Call money due on 10,000 shares @ ₹10 per share)
	Bank A/c		Dr.		98,000
		To Share final call A/c				98,000
	(Final Call money received for 9800 shares @ ₹10 per share and 200 shares failed to pay)
	Share Capital A/c (200×">××100)		Dr.		20,000
		To Share Final Call A/c (200×">××10)				2,000
		To Share Forfeiture A/c (200×">××90)				18,000
	(200 shares forfeited for non-payment of Final Call ₹ 10 per share)
	Bank A/c (150×">××75)		Dr.		11,250
	Share Forfeiture A/c (150×">××25)		Dr.		3,750
		To Share Capital A/c (150×">××100)	Dr.			15,000
	(150 forfeited shares reissued at ₹100 per share for ₹75)
	Share Forfeiture A/c		Dr.		9,750
		To Capital Reserve A/c				9,750
	(Balance of 150 reissue shares after adjustment transferred to Capital Reserve Account)

Working Notes:

Amount Transferred to Capital Reserve A/c

Amount credited to Share Forfeiture              Less: Amount debited to Share Forfeiture        Balance after adjustment

₹ 90 per share ₹25 per share   ₹ 65 per share

Amount transferred to Capital Reserve Account = Balance per share after adjustment × Number of shares reissued

₹ 9,750 = ₹ 65 × ₹ 150 per share