Question

Complete the following Journal entries:

Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
(i)	... Dr.		...
	To ...			...
	To ...			...
	To ...			...
	(Forfeiture of 1,000 shares of ₹ 10 each, ₹ 8 called-up, on which allotment money of ₹ 2 and First Call of ₹ 3 has not been received)
(ii)	... Dr.		...
	To ...			...
	To ...			...
	(Reissue of 1,000 forfeited shares fully paid-up at ₹ 11 per share)
(iii)	... Dr.		...
	To ...			...
	(Gain on the reissue of shares transferred to Capital Reserve Account)

Answer 1

Journal Entries
Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
(i)	Share Capital A/c   ...Dr.		8,000
	To Forfeited Shares A/c			3,000
	To Shares Allotment A/c			2,000
	To Shares First Call A/c			3,000
	(Forfeiture of 1,000 shares of ₹ 10 each, ₹ 8 called-up, on which allotment money of ₹ 2 and first call of ₹ 3 has not been received)
(ii)	Bank A/c   ...Dr.		11,000
	To Share Capital A/c			10,000
	To Securities Premium A/c			1,000
	(Reissue of 1,000 forfeited shares fully paid-up at ₹ 11 per share)
(iii)	Forfeited Shares A/c   ...Dr.		3,000
	To Capital Reserve A/c			3,000
	(Gain on the reissue of shares transferred to Capital Reserve Account)

Working Notes:

1. Amount of Share Capital Account to be debited = No. of shares forfeited × Amount Called-up

= 1,000 × ₹ 8 = ₹ 8,000

2. Amount of Forfeited Shares Account to be credited = Amount called-up – Amount not received on call

= ₹ 8,000 – (₹ 2,000 + ₹ 3,000) = ₹ 3,000

3. Securities Premium Account to be credited = Amount received on reissue – Nominal value of shares

= ₹ 11,000 – ₹ 10,000 = ₹ 1,000