Question

The Directors of M Ltd  resolved on 1st May, 2015 that 2,000 Equity Shares of ₹ 10 each , ₹ 7.50 paid be  forfeited for non-payment of final call of ₹ 2.50 . On 10th June, 2015, 1,800 of these shares were reissued for ₹ 6 per share . Give necessary Journal entries . 

Answer 1

Books of M Limited
Journal

Date	Particulars		L.F.	Debit Amount  Rs	Credit Amount  Rs
2012
May 01	Equity Share Capital A/c	Dr.		20,000
	To Share Forfeiture A/c				15,000
	To Call-in-Arrears A/c				5,000
	(2,000 shares of Rs 10 each forfeited for non-payment of final call Rs 2.5 per share)
June 10	Bank A/c	Dr.		10,800
	Share Forfeiture A/c	Dr.		7,200
	To Share Capital A/c				18,000
	(1,800 shares of Rs 10 each re-issued at Rs 6 per share fully paid-up)
	Share Forfeiture A/c	Dr.		6,300
	To Capital Reserve A/c				6,300
	(Balance in Shares Forfeiture Account of 1,800  re-issue, transferred to Capital Reserve Account)

Working Notes:

Share Forfeiture	7.5	Cr.
Share Forfeiture	4	Dr.
Balance in Share Forfeiture Account after re-issue	3.5	Cr. per share

Capital Reserve = No. of Shares reissued × Balance in Share Forfeiture Account after reissue (per share)

= 1,800 × Rs 3.5 (per share)

= Rs 6,300