Question

Dinesh Ltd. invited application for issuing 10,000 Equity shares of Rs 10 each. The amount was payable as follows:

On Application Rs 1

On Allotment Rs 2

On First call Rs 3

On Second and Final Call − Balance

The issue was fully subscribed. Ram to whom 100 shares were allotted, failed to pay the allotment money and his shares were forfeited immediately after allotment. Shyam to whom 150 shares were allotted failed to pay the first call. His share were also forfeited after the first call. Afterwards the second and final call was made. Mohan to whom 50 shares were allotted failed to pay the second and final call. His shares were also forfeited. All the forfeited shares were re-issued at Rs 9 per share fully paid up. Pass necessary Journal entries in the books of Dinesh Ltd.

Answer 1

In the books of Dinesh Ltd.                                    Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	Bank A/c	Dr.		10,000
	To Equity Share Application A/c				10,000
	(Share application money received for 10,000 shares at Re 1 each)
	Equity Share Application A/c	Dr.		10,000
	To Equity Share Capital A/c				10,000
	(Application money of 10,000 shares at Re 1 each transferred to Equity Share Capital)
	Equity Share Allotment A/c	Dr.		20,000
	To Equity Share Capital A/c				20,000
	(Allotment money due on 10,000 shares at Rs 2 each)
	Bank A/c	Dr.		19,800
	Calls-in-Arrears A/c	Dr.		200
	To Equity Share Allotment A/c				20,000
	(Allotment money of Rs 2 per share received on 9,900 shares and 100 shares failed to pay it)
	Equity Share Capital A/c (100 × Rs 3)	Dr.		300
	To Share Forfeiture A/c (100 × Rs 1)				100
	To Calls-in-Arrears A/c (100 × 2)				200
	(100 shares of Rs 10 each on which Rs 3 had called, forfeited for non-payment of allotment Re 2)
	Equity Share First Call A/c	Dr.		29,700
	To Equity Share Capital A/c				29,700
	(First call money due on 9,900 shares at Rs 3 each)
	Bank A/c	Dr.		29,250
	Calls-in-Arrears A/c	Dr.		450
	To Equity Share First Call A/c				29,700
	(First call money of Rs 3 per share received on 9,750 shares and 150 shares failed to pay it)
	Equity Share Capital A/c (150 × Rs 6)	Dr.		900
	To Share Forfeiture A/c (150 × Rs 3)				450
	To Calls-in-Arrears A/c				450
	(150 shares of Rs 10 each on which Rs 6 had called, forfeited due to non-payment of first call Rs 3 each)
	Equity Share Second and Final Call A/c	Dr.		39,000
	To Equity Share Capital A/c				39,000
	(Second and final call money due on 9,750 shares at Rs 4 each)
	Bank A/c	Dr.		38,800
	Calls-in-Arrears A/c	Dr.		200
	To Equity Share Second and Final Call A/c				39,000
	(Final call money of Rs 4 per share received on 9,650 shares and 50 shares failed to pay it)
	Equity Share Capital A/c	Dr.		500
	To Calls-in-Arrears A/c				200
	To Forfeited Shares A/c				300
	(50 shares of Rs 10 each forfeited due to non-payment of second call Rs 4 per share)
	Bank A/c (300 × Rs 9)	Dr.		2,700
	Share Forfeiture A/c (300 × Rs 1)	Dr.		300
	To Equity Share Capital A/c				3,000
	(300 shares re-issued at Rs 9 per share fully paid up)
	Share Forfeiture A/c	Dr.		550
	To Capital Reserve A/c				550
	(Balance in Share Forfeiture Account after re-issue of shares transferred to Capital Reserve)