Question

Software Ltd. company with registered capital of ₹ 5,00,000 in shares of ₹ 10 each issued 20,000 of such shares payable ₹ 2 on application, ₹ 4 on allotment, ₹ 2 on first call ₹ 2 on final call. All the money payable on allotment was duly received but on the first call being made, one shareholder paid the entire balance on his holding of 300 shares and five shareholders with a total holding of 1,000 shares failed to pay their dues on the first call. These shares were forfeited for non-payment of first call money. Final call was made and all the money due was received. Later on, forfeited shares were reissued @ ₹ 6 per share as fully paid-up.
Record the above in the company's Journal and prepare the Balance Sheet. 

Answer 1

Amount payable as

Application	₹	2
Allotment	₹	4
First Call	₹	2
Final Call	₹	2
		10

Books of Software Ltd.
Journal

Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
	Bank A/c	Dr.		40,000
	To Share Application A/c				40,000
	(Share application money received for 20,000 shares at ₹  2 each)
	Share Application A/c	Dr.		40,000
	To Share Capital A/c				40,000
	(Share application money of 20,000 shares at ₹  2 each transferred to Share Capital)
	Share Allotment A/c	Dr.		80,000
	To Share Capital A/c				80,000
	(Share allotment due on 20,000 shares at ₹  4 each)
	Bank A/c	Dr.		80,000
	To Share Allotment A/c				80,000
	(Share allotment money received)
	Share First Call A/c	Dr.		40,000
	To Share Capital A/c				40,000
	(Share first call due on 20,000 shares at ₹  2 each)
	Bank A/c	Dr.		38,600
	Call-in-Arrears A/c (1,000×2)	Dr.		2,000
	To Share First Call A/c				40,000
	To Calls-in-Advance (300×2)				600
	(Share first call of ₹  2 per share received on 19,000 shares along with calls-in-advance of 300 shares at ₹  2 each and holders of 1,000 shares failed to pay the first call)
	Share Capital A/c	Dr.		8,000
	To Share Forfeiture A/c (1,000×6)				6,000
	To Calls-In-Arrears A/c				2,000
	(1,000 shares of ₹  10 each on which ₹  8 had called, forfeited for non-payment of first call ₹  2 per share)
	Share Final Call A/c	Dr.		38,000
	To Share Capital A/c				38,000
	(Share final call due on 19,000 shares at ₹  2 each)
	Bank A/c	Dr.		37,400
	Calls-In-Advance A/c	Dr.		600
	To Share Final Call A/c				38,000
	(Share final call received from 18,700 shares and calls-in-advance of 300 shares adjusted)
	Bank A/c	Dr.		6,000
	Share Forfeiture A/c	Dr.		4,000
	To Share Capital A/c				10,000
	(1,000 shares, re-issued at ₹  6 per share as fully paid-up)
	Share Forfeiture A/c	Dr.		2,000
	To Capital Reserve A/c				2,000
	(Balance of Share Forfeiture Account after re-issue transferred to Capital Reserve)

As per the Schedule III of Companies Act, 2013, the Company's Balance Sheet is presented as follows.

A Ltd.
Balance Sheet

Particulars	Note No.	Amount  (₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital	1	2,00,000
b. Reserves and Surplus	2	2,000
2. Non-Current Liabilities
3. Current Liabilities
Total		2,02,000
II. Assets
1. Non-Current Assets
2. Current Assets
a. Cash and Cash Equivalents	3	2,02,000
Total		2,02,000

NOTES TO ACCOUNTS 

Note No.	Particulars	Amount (₹)
1	Share Capital
	Authorised Share Capital
	50,000 shares of Rs 10 each	5,00,000
	Issued Share Capital
	20,000 shares of Rs 10 each	2,00,000
	Subscribed, Called-up and Paid-up Share Capital
	20,000 shares of Rs 10 each	2,00,000
2	Reserves and Surplus
	Capital Reserve	2,000
3	Cash and Cash Equivalents
	Cash at Bank	2,02,000

Working Notes:

Share Forfeiture Credit (at the time of forfeiture of shares)	6,000
Less: Share Forfeiture Debit (at the time of re-issue shares)	4,000
Balance in Share Forfeiture Account after re-issue of shares	2,000

Capital Reserve = Balance in Share Forfeiture Account of re-issued shares = Rs 2,000