Question

Journalise the following:

C Ltd. forfeited 300 shares of ₹10 each on which on has been called and ₹5 has been paid. Out of these, 100 shares are re-issued for ₹6 per share as ₹7 paid-up.

Answer 1

Journal entries In the books of C Ltd.
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Share Capital A/c (300 × ₹7)     ...Dr.		2,100
	To Calls in Arrears A/c (300 × ₹2)			600
	To Share Forfeiture A/c (300 × ₹5)			1,500
	(Being 300 shares forfeited for non-payment of ₹2 per share)
2.	Bank A/c (100 × ₹6)     ...Dr.		600
	Share Forfeiture A/c (100 × ₹1 discount)		100
	To Share Capital A/c (100 × ₹7)			700
	(Being 100 shares reissued @ ₹6 each as ₹7 paid-up)
3.	Share Forfeiture A/c     ...Dr.		400
	To Capital Reserve A/c			400
	(Being profit on reissue of shares transferred to Capital Reserve)

Working Note:

Forfeiture per share = ₹5
On 100 shares: Forfeiture = ₹500
Discount allowed = ₹1 × 100 = ₹100
Profit = ₹500 – ₹100 = ₹400 → Capital Reserve