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Question
Record the journal entries for forfeiture and reissue of shares in the following cases:
(i) Basak Ltd. forfeited 20 shares of ₹ 10 each, ₹ 7 called-up on which the shareholder had paid application and allotment money of ₹ 5 per share. Out of these, 15 shares were reissued to Naresh as ₹ 7 per share paid-up for ₹ 8 per share.
(ii) Y Ltd. forfeited 90 shares of ₹ 10 each, ₹ 8 called-up issued at a premium of ₹ 2 per share to 'R' for non-payment of allotment money of ₹ 5 per share (including premium). Out of these, 80 shares were reissued to Sanjay as ₹ 8 called-up for ₹ 10 per share.
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Solution
Journal
|
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
||
|
(i) |
Share Capital A/c (20 Shares × 7) |
Dr. |
|
140 |
|
|
|
|
To Share Forfeiture A/c (20 Shares × 5) |
|
|
|
100 |
|
|
|
To Calls-in- Arrears A/c (20 Shares × 2) |
|
|
|
40 |
|
|
|
(20 Shares of Rs 10 each, Rs 7 called-up forfeited for the non-payment of call) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c (15 Shares × 8) |
Dr. |
|
120 |
|
|
|
|
To Share Capital A/c (15 Shares × 7) |
|
|
|
105 |
|
|
|
To Securities Premium A/c (15 Shares × 1) |
|
|
|
15 |
|
|
|
(15 shares were reissued as Rs 7 paid-up for Rs 8 per share) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Forfeiture A/c (15 Shares × 5) |
Dr. |
|
75 |
|
|
|
|
To Capital Reserve A/c |
|
|
|
75 |
|
|
|
(Transfer of profit on re-issue of 15 shares) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(ii) |
Share Capital A/c (90 Shares × 8) |
Dr. |
|
720 |
|
|
|
|
Securities Premium A/c (90 Shares × 2) |
Dr. |
|
180 |
|
|
|
|
To Share Forfeiture A/c (90 Shares × 5) |
|
|
|
450 |
|
|
|
To Share Allotment A/c (90 Shares × 5) |
|
|
|
450 |
|
|
|
(Shares forfeited for non-payment of allotment) |
|
|
|
|
|
|
|
Bank A/c (80 Shares × 10) |
Dr. |
|
800 |
|
|
|
|
To Share Capital A/c (80 Shares × 8) |
|
|
|
640 |
|
|
|
To Securities Premium A/c (80 Shares × 2) |
|
|
|
160 |
|
|
|
(80 shares were reissued for Rs 10, Rs 8 called-up) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Forfeiture A/c (80 Shares × 5) |
Dr. |
|
400 |
|
|
|
|
To Capital Reserve A/c |
|
|
|
400 |
|
|
|
(Transfer of profit on re-issue of 80 shares) |
|
|
|
|
|
Working Notes-
Note 1
Profit on forfeiture of 20 shares = 100
Profit on forfeiture of 15 shares=`100/20 xx 15` = Rs 75
Share forfeiture (Cr.) = Rs 75
Share Forfeiture (Dr.) = Nil
Capital Reserve = Rs 75
Note 2
Profit on forfeiture of 90 shares = Rs 450
Profit on forfeiture of 80 shares = `450/90 xx 80`= Rs 400
Share forfeiture (Cr.) = Rs 400
Share forfeiture (Dr.) = Nil
Capital Reserve = Rs 400
