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Pass Journal Entries in the Following Cases: - Accountancy

Journal Entry

Pass journal entries in the following cases:
M Ltd  forfeited 200 Equity Shares of ₹10 each , issued at a premium of  ₹ 5 per share , held by Ram for non-payment of the final call of  ₹ 3 per share . Of these , 100 shares were reissued  to Vishu at a discount of   ₹ 4 per share . 

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Solution

Journal

Date

Particulars

L.F.

Debit

Amount

Rs

Credit

Amount

Rs

 

Equity Share Capital A/c 

Dr.

 

20,000

 

 

To Share Forfeiture A/c (2,000 × Rs 7)

 

 

14,000

 

To Calls-in-Arrears A/c

 

 

6,000

 

(2,000 shares of Rs 10 each forfeited for the non-payment of Rs 3 per share)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

600

 

 

Share Forfeiture A/c (100 × Rs 4)

Dr.

 

400

 

 

To Equity Share Capital A/c

 

 

1,000

 

(100 shares of Rs 10 each reissued at Rs 6 per share as fully paid-up)

 

 

 

 

 

 

 

 

 

Share Forfeiture A/c

Dr.

 

300

 

 

To Capital Reserve A/c

 

 

300

 

(Balance in Share Forfeiture of 100 re-issued shares transferred to Capital Reserve )

 

 

 

Working Note-

Share Forfeiture of re-issued shares

Share Forfeiture

Cr.

Rs 7

per share

Share Forfeiture

Dr.

Rs 4

per share

Balance in share forfeiture after re-issue

Cr.

3

per share

Capital Reserve = Balance in Share Forfeiture after re-issue × No. of shares re-issued

= Rs 3 × 100 shares 

= Rs 300

Concept: Accounting Treatment of Forfeiture and Re-issue of Share
  Is there an error in this question or solution?
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APPEARS IN

TS Grewal Class 12 Accountancy - Double Entry Book Keeping Volume 2
Chapter 1 Accounting for Share Capital
Exercise | Q 62 | Page 122
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