12th | Ts grewal 2021-2022 | Question 41 to 45 | Ch: 1 Company Account: Accounting for share capital


Page No 9.117:

Question 41:

Ankit Ltd. issued 20,000 equity shares of 10 each at a premium of  ` 2 per share, payable as:

On Application

:

 ` 3

On Allotment

:

 ` 5 (including premium)

On First Call

:

 ` 2

On Second and Final Call

:

 ` 2

Vijay was allotted 500 shares. Pass the necessary Journal entries relating to the forfeiture of shares in following cases.

Case I

Vijay did not pay allotment money and his shares were immediately forfeited.

Case II

Vijay did not pay allotment and first call, his shares were forfeited after first call.

Case III

Vijay failed to pay first call and his shares were forfeited immediately.

Case IV

Vijay failed to pay both the calls and his shares were forfeited.

Answer:

Case I:

In the books of Ankit Ltd.

Journal

Date

Particulars

 

L.F.

Debit Amount ( `)

Credit Amount ( `)

 

Share Capital A/c (500 × 6)

Dr.

 

3,000

 

 

Securities Premium Reserve A/c (500 × 2)

Dr.

 

1,000

 

 

  To Share Forfeiture A/c (500 × 3)

 

 

 

1,500

 

  To Share Allotment A/c (500 × 5)

 

 

 

2,500

 

(Being 500 shares forfeited for non-payment of allotment money)

 

 

 

 

Case II:

In the books of Ankit Ltd.

Journal

Date

Particulars

 

L.F.

Debit Amount ( `)

Credit Amount ( `)

 

Share Capital A/c (500 × 8)

Dr.

 

4,000

 

 

Securities Premium Reserve A/c (500 × 2)

Dr.

 

1,000

 

 

  To Share Forfeiture A/c (500 × 3)

 

 

 

1,500

 

  To Share Allotment A/c (500 × 5)

 

 

 

2,500

 

  To Share First Call A/c (500 × 2)

 

 

 

1,000

 

(Being 500 shares forfeited for non-payment of allotment and first call)

 

 

 

 

Case III:

In the books of Ankit Ltd.

Journal

Date

Particulars

 

L.F.

Debit Amount
( `)

Credit Amount
( `)

 

Share Capital A/c (500 × 8)

Dr.

 

4,000

 

 

  To Share Forfeiture A/c (500 × 6)

 

 

 

3,000

 

  To Share First Call A/c (500 × 2)

 

 

 

1,000

 

(Being 500 shares forfeited for non-payment of first call)

 

 

 

 

Case IV:

In the books of Ankit Ltd.

Journal

Date

Particulars

 

L.F.

Debit
Amount ( `)

Credit
Amount ( `)

 

Share Capital A/c (500 × 10)

Dr.

 

5,000

 

 

  To Share Forfeiture A/c (500 × 6)

 

 

 

3,000

 

  To Share First Call A/c (500 × 2)

 

 

 

1,000

 

  To Share Second and Final Call (500 × 2)

 

 

 

1,000

 

(Being 500 shares forfeited for non-payment of first and second call)

 

 

 

 

 



Page No 9.118:

Question 42:

Black Stone Ltd. issued 10,000 Equity Shares of  ` 10 each at a premium of  ` 3 per share payable  ` 5 on application,  ` 5 (including premium) on allotment and the balance on first call. All the shares offered were applied for and allotted. All the money due on allotment was received except on 200 shares. Call was made. All the amount due thereon was received except on 300 shares. Directors forfeited 200 shares on which both allotment and call money were not received.

Pass necessary Journal entries to record the above.

Answer:

Issued and Applied 10,000 Shares at  ` 10 each at a premium of  ` 3 per share

Application

 `

5

 

Allotment

 `

5

(2+3)

First and Final Call

 `

3

 

 

 `

13

(10+3) Called-up

 

In the Books of Black Stone Ltd.
Journal

Date

Particulars

L.F.

Debit

Amount

( `)

Credit

Amount

( `)

 

 

 

 

 

 

Bank A/c

Dr.

 

50,000

 

 

To Equity Share Application A/c

 

 

50,000

 

(Share application money received for 10,000 shares at  ` 5 each)

 

 

 

 

 

 

 

 

 

Equity Share Application A/c

Dr.

 

50,000

 

 

To Equity Share capital A/c

 

 

50,000

 

(Share application money transferred to Share Capital Account)

 

 

 

 

 

 

 

 

 

Equity Share Allotment A/c

Dr.

 

50,000

 

 

To Equity Share Capital A/c

 

 

20,000

 

To Securities Premium

 

 

30,000

 

(Share allotment due on 10,000 shares at  ` 5 per share including premium  ` 3)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

49,000

 

 

Calls-in-Arrears A/c

Dr.

 

1,000

 

 

To Equity Share Allotment A/c

 

 

50,000

 

(All allotment money received except 200 shares)

 

 

 

 

 

 

 

 

 

Equity Share First and Final Call A/c

Dr.

 

30,000

 

 

To Equity Share Capital A/c

 

 

30,000

 

(First and final due on 10,000 shares at  ` 3 per share)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

29,100

 

 

Calls-in-Arrears A/c

Dr.

 

900

 

 

To Equity Share First and Final Calls A/c

 

 

30,000

 

(First and final call received on all shares except 300 shares)

 

 

 

 

 

 

 

 

 

Equity Share Capital A/c

Dr.

 

2,000

 

 

Securities Premium A/c

Dr.

 

600

 

 

To Share Forfeiture A/c

 

 

1,000

 

To Calls-in-Arrears A/c

 

 

1,600

 

(200 shares forfeited for the non-payment of  ` 8 per share including  ` 3 premium)

 

 

 

 



Page No 9.118:

Question 43: Determine the maximum permissible discount and minimum reissue price that a company can allow at

the time of reissue of forfeited shares in the following cases:

6) A share of ` 10 originally issued at par on which application and allotment money of ` 5 was received.

(ii) A share of ` 10 originally issued at a premium of ` 1 on which application and allotment money

Including premium) of ` 5 was received.

(i) A share of ` 10 originally issued at a premium of ` 1 on which application and allotment money

(Excluding premium) of ` 5 was received.

 

Answer:

 

Situations

Maximum

Permissible  Discount

Minimum

Reissue price

1

5

5

2

4

6

3

5

5

 



Page No 9.118:

Question 44: What amount of gain on reissue will be transferred to Capital Reserve under following situations?

(i) 3,000 shares of `10 each of Rakesh were forfeited by crediting ` 5,000 to Forfeited Shares Account.

Out of these, 1,800 shares were reissued to Mohan for ` 9 per share as fully paid-up.

(ii) Z Ltd. forfeited 20 shares of ` 100 each (` 60 called-up) issued at par to Shiv on which he paid

` 20 per share. Out of these, 15 shares were reissued to Rajesh as ` 60 paid-up for ` 45 per share.

Answer:

Situations

Gain on Re-Issue of forfeited shares

1

`1200

2

`75

 



Page No 9.118:

Question 45:

Z Ltd. issued 10,000 shares of the value of   ` 10 each , payable   ` 3 on application,  ` 3 on allotment and  ` 4 on the first and final call . All amounts are duly received except the call money on 100 shares . These shares are subsequently forfeited by Directors and are resold as fully paid-up for  ` 500 .
Give necessary journal entries for the transactions.

Answer:

Journal

Date

Particulars

L.F.

Debit

Amount

  `

Credit

Amount

  `

 

 

 

 

 

 

Bank A/c

Dr.

 

30,000

 

 

To Share Application A/c

 

 

30,000

 

(Share application money received for 10,000 shares at  ` 3 each)

 

 

 

 

 

 

 

 

 

Share Application A/c

Dr.

 

30,000

 

 

To Share Capital A/c

 

 

30,000

 

(Share application money transferred to Share Capital)

 

 

 

 

 

 

 

 

 

Share Allotment A/c

Dr.

 

30,000

 

 

To Share Capital A/c

 

 

30,000

 

(Allotment due on 10,000 shares at  ` 3 per shares)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

30,000

 

 

To Share Allotment A/c

 

 

30,000

 

(Share allotment money received)

 

 

 

 

 

 

 

 

 

Share First and Final Call A/c

Dr.

 

40,000

 

 

To Share Capital A/c

 

 

40,000

 

(First and final call due on 10,000 shares at  ` 4 each)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

39,600

 

 

Calls-in-Arrears A/c

Dr.

 

400

 

 

To Share First and Final Call

 

 

40,000

 

(First and final call of  ` 4 per share received on 9,900 shares, and 100 shares failed to pay it)

 

 

 

 

 

 

 

 

 

Share Capital A/c

Dr.

 

1,000

 

 

To Share Forfeiture A/c

 

 

600

 

To Calls-in-Arrears A/c

 

 

400

 

(100 shares of  ` 10 each forfeited for the non-payment of first and final call  ` 4 per share)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

500

 

 

Share Forfeiture A/c

Dr.

 

500

 

 

To Share Capital A/c

 

 

1,000

 

(100 shares of  ` 10 each re-issued for the sum of  ` 500)

 

 

 

 

 

 

 

 

 

Share Forfeiture A/c

Dr.

 

100

 

 

To Capital Reserve A/c

 

 

100

 

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

 

 

 

 

 

 

 

 

 

Working Note

Shares forfeited account (Dr.)  

=

600

Less; Share forfeited account (Cr.)

=

(500)

Balance of share forfeited account after re-issue

=

100

capital reserve(Amount to be transferred) = Balance of share forfeited account                  =100