12th | Ts grewal 2021-2022 | Question 46 to 50 | Ch: 1 Company Account: Accounting for share capital

Page No 9.118:

Question 46:

Alfa Ltd. forfeited 900 Equity Shares of  ` 100 each for the non-payment of allotment money of  ` 30 per share and the first call of  ` 20 per share. The second and final call of  ` 25 per share has not been made . The forfeited shares were reissued for  ` 90 per share ,  ` 75 paid-up. Journalise the above.

Answer:

Application	25	Balancing Figure
Allotment	30
First Call	20
Final Call	25	Un-called
	100

Called-up  ` 75 per share

Books of X Limited Journal
Date	Particulars		L.F.	Debit Amount   `	Credit Amount   `
	Equity Share Capital A/c (900×75)	Dr.		67,500
	To Share Forfeiture A/c				22,500
	To Calls-in-Arrears A/c				45,000
	(900 shares of  ` 100 each  ` 75 called-up, forfeited for the non-payment sum of allotment  ` 30 and first call  ` 20 per share)
	Bank A/c	Dr.		81,000
	To Share Capital A/c				67,500
	To Securities Premium A/c				13,500
	(900 shares of  ` 100 each re-issued as  ` 75 paid-up for  ` 90 each)
	Share Forfeiture A/c	Dr.		22,500
	To Capital Reserve A/c				22,500
	(Balance of Share Forfeiture Account after re-issue, transferred to Capital Reserve Account)

 

Working Notes-

 

Share forfeiture account credit	=	Share application money received for 900shares
	=	900×25  `.
	=	22,500
Calculation of capital reserve
Share forfeiture account credit	=	22,500
Share forfeiture account debit	=	Nil
Capital reserve	=	22,500

 

Page No 9.118:

Question 47: Max Ltd. forfeited 500 shares of `100 each for non-payment of first call of ` 20 per share and final call of

`25 per share. 250 of these shares were re-issued at ` 50 per share fully paid-up.

Pass the necessary Journal entries in the books of Max Ltd. for forfeiture and re-issue of shares. Also prepare

the Share Forfeiture Account. (CBSE 2020)

Answer:

Journal
Date	Particulars		L.F.	Debit   `	Credit   `
	Share Capital    A/c	Dr.		50,000
	To Share forfeited   A/c				27,500
	To Share first call   A/c				10,000
	To Share second call   A/c				12,500
	(Being 500 shares forfeited for non Payment of first and second Call )
	Bank   A/c	Dr.		12,500
	Share forfeited   A/c			12,500
	To Share Capital   A/c				25,000
	(Being 250 shares issued at 50 per shares)
	Share forfeited   A/c	Dr.		1,250
	To Capital Reserve   A/c				1,250
	(Being Forfeited amount of 250 re-issued shares)

 

Page No 9.118:

Question 48:  On 1st May, 2021, Moneyplus Ltd. forfeited 200 shares of ` 20 each, ` 15 per share called-up, on which

` 10 per share has been paid by A, the amount of the first call of ` 5 per share being unpaid. Ten days later, the

Directors reissued the forfeited shares to B credited as `15 per share paid-up, fora payment of `10 per share

Give Journal entries in the company's books to record the forfeited shares and their reissue.

Answer:

Journal
Date	Particulars		L.F.	Debit Amount   `	Credit Amount   `
2014
May 01	Share Capital A/c	Dr.		3,000
	To Share Forfeiture A/c				2,000
	To share first call A/c				1,000
	(200 shares of  ` 15 each forfeited for non-payment of first call  `5 per share)
May 01	Bank A/c	Dr.		2,000
	Share Forfeiture A/c	Dr.		1,000
	To Share Capital A/c				3,000
	(500 shares of  ` 10 each re-issued at  ` 15 per share fully paid-up)
May 11	Share Forfeiture A/c	Dr.		1,000
	To Capital Reserve A/c				1,000
	(Balance in Shares Forfeiture Account of 200 shares re-issue, transferred to Capital Reserve Account)

 

Working note;

Distribution of amount and no. of installment Application and allotment etc.	=	10
First Call	=	5	200 shares
Second and final call	=	5
Total	=	20
No. of shares forfeited and re-issued=200

 

 

Page No 9.118:

Question 49:

The Directors of Maharana Ltd  resolved on 1st May, 2020 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, 2020, 1,800 of these shares were reissued for  ` 6 per share . Give necessary Journal entries.

Answer:

Books of M Limited Journal
Date	Particulars		L.F.	Debit Amount   `	Credit Amount   `
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  ` 10 each forfeited for non-payment of final call  ` 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  ` 10 each re-issued at  ` 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 ×  ` 3.5 (per share)

=  ` 6,300

 

Page No 9.119:

Question 50:

Sunshine Ltd. issued 20,000 shares of  ` 100 each payable  ` 25 per share on application ,  ` 25 per share on allotment and the balance in two calls of   ` 25 each. The company did not make the final call of  ` 25 per share. All the money was duly received with the exception of the amount due on the first call on 400 shares held by Mr. Modi. The Board of Directors forfeited these shares and subsequently reissued them @  ` 75 per share paid-up for a sum of  ` 28,000.
Journalise the above transactions and prepare Share Capital Account.

Answer:

Issued and applied capital 20,000 shares of  ` 100 each

Payable as:

Application	`	25
Allotment	`	25
First Call	`	25
Called-up	`	75	per share
Final Call	`	25
	`	100	per share

 

Journal
Date	Particulars		L.F.	Debit Amount  ( `)	Credit Amount   ( `)
	Bank A/c	Dr.		5,00,000
	To Share Application A/c				5,00,000
	(Share application money received for 20,000 shares at  ` 25 each)
	Share Application A/c	Dr.		5,00,000
	To Share Capital A/c				5,00,000
	(Application money transferred to Share Capital Account)
	Share Allotment A/c	Dr.		5,00,000
	To Share Capital A/c				5,00,000
	(Share Allotment due on 20,000 shares at  ` 25 each)
	Bank A/c	Dr.		5,00,000
	To Share Allotment A/c				5,00,000
	(Allotment money received)
	Share First Call A/c	Dr.		5,00,000
	To Share Capital A/c				5,00,000
	(Share First Call due on 20,000 shares of  ` 25 each)
	Bank A/c	Dr.		4,90,000
	Calls-in-Arrears A/c	Dr.		10,000
	To Share First Call A/c				5,00,000
	(Share First Call  ` 25 per share received on 19,600 shares and a holder of 400 shares did not pay it)
	Share Capital A/c	Dr.		30,000
	To Share Forfeiture A/c				20,000
	To Calls-in-Arrears A/c				10,000
	(400 shares of  ` 100 each,  ` 75 called-up, forfeited for the non-payment of Share First Call  ` 25 per share)
	Bank A/c	Dr.		28,000
	Share Forfeiture A/c	Dr.		2,000
	To Share Capital A/c				30,000
	(400 shares of  ` 100 each,  ` 75 paid-up, reissued for the sum of  ` 28,000)
	Share Forfeiture A/c	Dr.		18,000
	To Capital Reserve A/c				18,000
	(Balance in share forfeiture after re-issue, transferred to capital reserve)

 

Share Capital Account
Dr.				Cr.
Particulars		Amount ( `)	Particulars		Amount ( `)
Share Forfeiture		20,000	Share Application		5,00,000
Calls-in-Arrears		10,000	Share Allotment		5,00,000
			Share First Call		5,00,000
			Bank		28,000
Balance c/d			Share Forfeiture		2,000
		15,30,000			15,30,000

 

Working Note-

 

Share Forfeiture Credit	20,000
Less: Share Forfeiture Debit	2,000
Balance in Share Forfeiture Account after re-issue	18,000

Capital Reserve = Balance in Share Forfeiture Account after re-issue

=  ` 18,000

 

 

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