Question

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.

Answer 1

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