Question

A, who holds 200 shares of ₹100 each, has paid only ₹25 per share as application money.
B, who holds 300 shares of ₹100 each, has paid ₹25 per share on application and ₹30 per share on allotment.
C, who holds 400 shares of ₹100 each, has paid ₹25 per share on application, no per share on allotment and ₹20 per share on first call.
They failed to pay their arrears and the final call. Their shares were forfeited and re-issued at ₹95 per share.

Prepare necessary journal entries.

Answer 1

Calculation Table

Shareholder	Shares	Application ₹2.50	Allotment ₹2.00	First Call ₹3.00	Final Call ₹2.50
A (100 Shares)	100	₹250	*₹200	*₹300	*₹250
B (200 Shares)	200	₹500	₹400	*₹600	*₹500
C (300 Shares)	300	₹750	₹600	₹900	*₹750
Amount Received	-	₹1,500	₹1,000	₹900	-
Amount Not Received	-	-	₹200	₹900	₹1,500

* Represents amount not received

Journal entries
Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
1.	Share Capital A/c     ...Dr.		6,000
	To Calls in Arrears A/c (Note 1)			2,600
	To Share Forfeiture A/c			3,400
	(600 shares forfeited)
2.	Bank A/c     ...Dr.		5,400
	Share Forfeiture A/c     ...Dr.		600
	To Share Capital A/c			6,000
	(600 shares re-issued at ₹9 each, i.e., 10% discount)
3.	Share Forfeiture A/c     ...Dr.		2,800
	To Capital Reserve A/c			2,800
	(Transfer of balance of Share Forfeiture A/c to Capital Reserve)