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Super Star Ltd. Makes an Issue of 10,000 Equity Shares of ₹ 100 Each, Payable As: - Accountancy

Journal Entry

Super Star Ltd. makes an issue of 10,000 Equity Shares of ₹ 100 each, payable as:

 On application and allotment  ₹ 50 per share,
 On first call  ₹ 25 per share,
 On second and final call  ₹ 25 per share.

Members holding 400 shares did not pay the second and final call and the shares are duly forfeited, 200 of which are reissued as fully paid-up @₹ 50 per share. Pass journal entries in the books of the company.

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Solution

Book of Super Star Limited
Journal

Date

Particulars

L.F.

Debit

Amount

Rs

Credit

 Amount

Rs

 

Bank A/c

Dr.

 

5,00,000

 

 

To Equity Share Application and Allotment A/c

 

 

5,00,000

 

(Share Application and Allotment money received for 10,000 shares at Rs 50 each)

 

 

 

 

 

 

 

 

 

Equity Share Application and Allotment A/c

Dr.

 

5,00,000

 

 

To Equity Share Capital A/c

 

 

5,00,000

 

(Share Application and Allotment money transferred to Equity Share Capital Account)

 

 

 

 

 

 

 

 

 

Equity Share First Call A/c

Dr.

 

2,50,000

 

 

To Equity Share Capital A/c

 

 

2,50,000

 

(Share First Call due on 10,000 shares of Rs 25 each)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

2,50,000

 

 

To Equity Share First-Call A/c

 

 

2,50,000

 

(First Call money received)

 

 

 

 

 

 

 

 

 

Equity Share Final Call A/c

Dr.

 

2,50,000

 

 

To Equity Share Capital A/c

 

 

2,50,000

 

(Equity Share Final Call due on 10,000 shares of Rs 25 each)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

2,40,000

 

 

Calls-in-Arrears A/c

Dr.

 

10,000

 

 

To Equity Share Final Call A/c

 

 

2,50,000

 

(Share Final Call of Rs 25 per share received on 9,600 shares and holders of 400 shares failed to pay it)

 

 

 

 

 

 

 

 

 

Equity Share Capital A/c

Dr.

 

40,000

 

 

To Share Forfeiture A/c

 

 

30,000

 

To Calls-In-Arrears A/c

 

 

10,000

 

(400 shares of Rs 100 each forfeited for the non-payment final call Rs 25 per share)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

10,000

 

 

Share Forfeiture A/c

Dr.

 

10,000

 

 

To Equity Share Capital A/c

 

 

20,000

 

(200 shares of Rs 100 each re-issued at Rs 50 per share fully paid-up)

 

 

 

 

 

 

 

 

 

Share Forfeiture A/c

Dr.

 

5,000

 

 

To Capital Reserve A/c

 

 

5,000

 

(Balance in Share Forfeiture of 200 shares of after re-issue, transferred to Capital Reserve)

 

 

 

Working Note-

Share Forfeiture

Rs

75

Cr.

Share Forfeiture

Rs

50

Dr.

Balance in Share Forfeiture Account for re-issued shares

Rs

25

Cr. per share

Capital Reserve = Balance in Share Forfeiture Account for re-issued shares × Number of Share reissued

= Rs 25 × 200 = Rs 5,000 

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 47 | Page 120
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