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