Question

W Ltd. issued 10,000 shares of ₹100 each. During the year only ₹80 were called payable as follows:

On Application	₹25
On Allotment	₹20
On Ist Call	₹20
On IInd Call	₹15

Amounts were received as follows:

On 8,000 shares the full amount called
On 1,200 shares ₹65 per share
On 500 shares ₹45 per share
On 300 shares ₹25 per share

The directors forfeited those shares on which less than ₹65 per share were received. Show entries in the Cash Book and Journal and prepare the Balance Sheet.

Answer 1

Journal entries In the books of W Ltd.
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Bank A/c     ...Dr.		2,50,000
	To Share Application A/c			2,50,000
	(Application money received on 10,000 shares @ ₹25)
2.	Share Application A/c     ...Dr.		2,50,000
	To Share Capital A/c			2,50,000
	(Application money transferred to Share Capital)
3.	Share Allotment A/c     ...Dr.		2,00,000
	To Share Capital A/c			2,00,000
	(Allotment due @ ₹20 on 10,000 shares)
4.	Bank A/c     ...Dr.		1,94,000
	Calls-in-Arrears A/c     ...Dr.		6,000
	To Share Allotment A/c			2,00,000
	(Allotment money received; arrears from 800 shares)
5.	Share First Call A/c     ...Dr.		2,00,000
	To Share Capital A/c			2,00,000
	(First call due @ ₹20 on 10,000 shares)
6.	Bank A/c     ...Dr.		1,84,000
	Calls-in-Arrears A/c     ...Dr.		16,000
	To Share First Call A/c			2,00,000
	(First call money received, ₹16,000 unpaid)
7.	Share Second Call A/c     ...Dr.		1,50,000
	To Share Capital A/c			1,50,000
	(Second call due @ ₹15 on 10,000 shares)
8.	Bank A/c     ...Dr.		1,20,000
	Calls-in-Arrears A/c     ...Dr.		30,000
	To Share Second Call A/c			1,50,000
	(Second call received, ₹30,000 unpaid)
9.	Share Capital A/c     ...Dr.		64,000
	To Calls in Arrears A/c			34,000
	To Share Forfeiture A/c			30,000
	(800 shares forfeited for non-payment of calls)

Cash Book (Bank Column Only)

Date	Particulars	Amount (₹)
1.	To Share Application A/c	2,50,000
2.	To Share Allotment A/c	1,94,000
3.	To Share First Call A/c	1,84,000
4.	To Share Second Call A/c	1,20,000
	Total	₹7,48,000

Working Notes:

1) Total Shares Issued: 10,000

2) Shares with full ₹80 received: 8,000
8,000 × 80 = ₹6,40,000

3) 1,200 shares with ₹65 received
1,200 × 65 = ₹78,000

4) 500 shares with ₹45; 300 shares with ₹25
500 × ₹45 = ₹22,500
300 × ₹25 = ₹7,500
Total = ₹30,000

5) Total Bank = ₹6,40,000 + ₹78,000 + ₹30,000 = ₹7,48,000

6) Forfeited Shares: 800
₹80 called × 800 = ₹64,000
Received ₹30,000 → Calls in Arrears ₹34,000
Credit to Share Forfeiture A/c = ₹30,000

7) Calls in Arrears After Forfeiture:

• Allotment: 6,000

• First Call: 16,000

• Second Call: 30,000

• Less: Forfeited (All 800 shares): 34,000

• Net Calls in Arrears = ₹18,000

Balance Sheet of W Ltd.
Liabilities	Amount (₹)	Assets	Amount (₹)
Share Capital
Authorized Capital: 10,000 shares of ₹100 each	10,00,000	Bank Balance (Cash Book)	7,48,000
Issued and Called-up: 10,000 shares @ ₹80	8,00,000	Calls in Arrears (1,200 shares)	18,000
Less: 800 shares forfeited (₹80 each)	64,000
Paid-up Share Capital (9,200 shares × ₹80)	7,36,000
Share Forfeiture A/c	30,000
Total	7,66,000	Total	7,66,000