Question

Journalise the following:

A Ltd. forfeited 1,000 shares of ₹10 each, ₹8 paid, for non-payment of final call of ₹2 per share. Out of these, 400 shares were re-issued as fully paid-up in such a way that ₹2,000 were transferred to capital reserve.

Answer 1

Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Share Capital A/c (1,000 × ₹10)     ...Dr.		10,000
	To Calls in Arrears A/c (1,000 × ₹2)			2,000
	To Share Forfeiture A/c (1,000 × ₹8)			8,000
	(Being 1,000 shares forfeited for non-payment of final call of ₹2)
2.	Bank A/c (400 × ₹7)     ...Dr.		2,800
	Share Forfeiture A/c (400 × ₹3)     ...Dr.		1,200
	To Share Capital A/c (400 × ₹10)			4,000
	(Being 400 forfeited shares reissued @ ₹7 each as fully paid-up, ₹3 discount)
3.	Share Forfeiture A/c     ...Dr.		2,000
	To Capital Reserve A/c			2,000
	(Being gain on reissue of 400 shares transferred to Capital Reserve)

Re-issue of 400 shares as fully paid-up (Capital Reserve = ₹2,000)

Reissue price = ₹8 per share

Bank A/c = 400 × ₹8 = ₹3,200

Discount allowed = ₹2/share = ₹800

Share Forfeiture used = ₹800

Remaining forfeiture transferred to Capital Reserve = ₹2,000