Page No 9.119:
Question 56:
Show the
forfeiture and reissue entries under each of the following cases:
(i) KBC Ltd. forfeited 300 shares of ` 10
each, ` 8 called-up held by Mr. A for
non-payment of second call money of ` 3 per share. These shares
were reissued to Mr. Z for ` 10 per share as fully
paid-up.
(ii) KK Ltd. forfeited 400 shares of ` 10 each, fully called-up,
held by Mr. B for non-payment of final call money of ` 4 per
share. These shares were reissued to Mr. T at ` 12 per share as fully
paid-up.
(iii) Light Ltd. forfeited 250 shares of ` 10 each, fully called-up
held by Mr. C for non-payment of allotment money of ` 3 per share and first and final
call money of ` 4 per
share. These shares were reissued @ ` 8 per
share as fully paid-up to Mr. P.
Answer:
|
(i) |
Books of KBC Limited Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit Amount ( ` ) |
Credit Amount ( ` ) |
||
|
|
|
|
|
|
||
|
|
Share
Capital |
Dr. |
|
2,400 |
|
|
|
|
To Share Forfeiture A/c |
|
|
1,500 |
||
|
|
To Calls-in-Arrears A/c |
|
|
900 |
||
|
|
(300
shares of ` 10 each
on which had called ` 8, forfeited for non-payment of second call ` 3 per share) |
|
|
|
||
|
|
|
|
|
|
||
|
|
Bank A/c |
Dr. |
|
3,000 |
|
|
|
|
To Share Capital A/c |
|
|
3,000 |
||
|
|
(300
shares of ` 10 each
re-issued) |
|
|
|
||
|
|
|
|
|
|
||
|
|
Share
Forfeiture A/c |
Dr. |
|
1,500 |
|
|
|
|
To Capital Reserve A/c |
|
|
1,500 |
||
|
|
(Balance
in Share Forfeiture Account after re-issue transferred to Capital Reserve) |
|
|
|
||
|
|
|
|
|
|
||
Working Notes-
|
Share Forfeiture Credit (at the time of forfeiture of shares) |
1,500 |
|
Less: Share Forfeiture Debit (at the time of re-issue shares) |
NIL |
|
Balance in Share Forfeiture after re-issue of shares |
1,500 |
Capital
Reserve = Balance in Share Forfeiture of re-issued shares
= ` 1,500
|
(ii) |
Books of KK Limited Journal |
||||
|
Date |
Particulars |
L.F. |
Debit ( `) |
Credit ( `) |
|
|
|
|
|
|
|
|
|
|
Share
Capital A/c |
Dr. |
|
4,000 |
|
|
|
To Share Forfeiture A/c |
|
|
2,400 |
|
|
|
To Calls-in-Arrears A/c |
|
|
1,600 |
|
|
|
(400
shares of ` 10
forfeited for the non-payment of final call ` 4 per share) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
4,800 |
|
|
|
To Share Capital A/c |
|
|
4,000 |
|
|
|
To Securities Premium A/c |
|
|
800 |
|
|
|
(400
shares of `10 each
re-issued at ` 12 per share as fully paid-up) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
Forfeiture A/c |
Dr. |
|
2,400 |
|
|
|
To Capital Reserve A/c |
|
|
2,400 |
|
|
|
(Balance
of Share Forfeiture after re-issue transferred to Capital Reserve) |
|
|
|
|
|
|
|
|
|
|
|
Working
Notes-
|
Share
Forfeiture Credit (at the time of forfeiture of shares) |
2,400 |
|
Less: Share
Forfeiture Debit (at the time of re-issue shares) |
NIL |
|
Balance in
Share Forfeiture after re-issue of shares |
2,400 |
Capital
Reserve = Balance in Share Forfeiture of re-issued shares
= ` 2,400
|
(iii) |
Books of Light Limited Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit Amount ( ` ) |
Credit Amount ( ` ) |
||
|
|
|
|
|
|
||
|
|
Share
Capital A/c |
Dr. |
|
2,500 |
|
|
|
|
To Share Forfeiture A/c (250×3) |
|
|
750 |
||
|
|
To Calls-in-Arrears A/c |
|
|
1,750 |
||
|
|
(250
shares of ` 10 each
forfeited for the non-payment ` 7 per share) |
|
|
|
||
|
|
|
|
|
|
||
|
|
Bank A/c |
Dr. |
|
2,000 |
|
|
|
|
Share
Forfeiture A/c |
Dr. |
|
500 |
|
|
|
|
To Share Capital A/c |
|
|
2,500 |
||
|
|
(250
shares of ` 10 each
re-issued for ` 8 per share as fully paid-up ) |
|
|
|
||
|
|
|
|
|
|
||
|
|
Share
Forfeiture A/c |
Dr. |
|
250 |
|
|
|
|
To Capital Reserve A/c |
|
|
250 |
||
|
|
(Balance
in Share Forfeiture Account after re-issue transferred to Capital Reserve) |
|
|
|
||
|
|
|
|
|
|
||
Working
Notes-
|
Share
Forfeiture Credit (at the time of forfeiture of shares) |
750 |
|
Less: Share
Forfeiture Debit (at the time of re-issue shares) |
500 |
|
Balance in
Share Forfeiture after re-issue of shares |
250 |
Capital
Reserve = Balance in Share Forfeiture of re-issued shares = `
250
Page No 9.120:
Question 57:
Rekha holds 100 shares of ` 10
each on which he has paid ` 1 per share
on application.
Sunita
holds 200 shares of
` 10 each on which he has paid ` 1 and ` 2 per share
on application and allotment respectively.
Teena
holds 300 shares of
` 10 each and has paid ` 1 on
application, ` 2 on allotment and ` 3 on first
call. They all fail to pay their arrears and the second call of ` 2
per share . Shares are forfeited and subsequently reissued @ ` 11 per share as fully
paid-up.
journalise the above.
Answer:
|
Application |
` |
1 |
|
|
Allotment |
` |
2 |
|
|
First Call |
` |
3 |
|
|
Second
Call |
` |
2 |
|
|
|
` |
8 |
Called-up |
|
Journal Entries |
|||||
|
Date |
Particulars |
L.F. |
Debit Amount ` |
Credit Amount ` |
|
|
|
Forfeiture of Shares |
|
|
|
|
|
|
Shares of
A |
|
|
|
|
|
|
Share
Capital A/c |
Dr. |
|
800 |
|
|
|
To Share Forfeiture A/c |
|
|
100 |
|
|
|
To Calls-In-Arrears A/c |
|
|
700 |
|
|
|
(100
shares of ` 10 each, ` 8 called-up, held by A forfeited
for the non-payment of ` 7 per share) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares of
B |
|
|
|
|
|
|
Share
Capital A/c |
Dr. |
|
1,600 |
|
|
|
To Share Forfeiture A/c |
|
|
600 |
|
|
|
To Calls-in-Arrears A/c |
|
|
1,000 |
|
|
|
(200
shares of ` 10 each, ` 8 called-up, held by B forfeited
for non-payment of ` 5 per share) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares of
C |
|
|
|
|
|
|
Share
Capital A/c |
Dr. |
|
2,400 |
|
|
|
To Share Forfeiture A/c |
|
|
1,800 |
|
|
|
To Calls-in-Arrears A/c |
|
|
600 |
|
|
|
(300
shares of ` 10 each, ` 8 called-up held by C forfeited
for the non-payment of ` 2 per share) |
|
|
|
|
|
|
Re-issue of shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
6,600 |
|
|
|
To Share Capital A/c |
|
|
6,000 |
|
|
|
To Securities Premium A/c |
|
|
600 |
|
|
|
(600
shares of ` 10 each
re-issued at ` 11 per share fully paid-up) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
Forfeiture A/c |
Dr. |
|
2,500 |
|
|
|
To Capital Reserve A/c |
|
|
2,500 |
|
|
|
(Share
Forfeiture transferred to Capital Reserve) |
|
|
|
|
|
|
|
|
|
|
|
Working
Note:
|
Share Forfeiture
of 100 shares held by Rekha |
` |
100 |
Cr. |
|
Share Forfeiture
of 200 shares held by Sunita |
` |
600 |
Cr. |
|
Share Forfeiture
of 300 shares held by Teena |
` |
1,800 |
Cr. |
|
Total
Share Forfeiture credit (at the time of cancellation of shares) |
` |
2,500 |
|
Calculation
of Capital Reserve
Total Share
Forfeiture (at the time of cancellation of shares) = `
2,500 Cr.
Less: Total
Share Forfeiture (at the time of re-issue of shares) = (NIL) Dr.
Capital
Reserve = ` 2,500
Page No 9.120:
Question 58:
Record the
journal entries for forfeiture and reissue of shares in the following cases:
(i) Basak Ltd. forfeited 20
shares of ` 10 each, ` 7 called-up
on which the shareholder had paid application and allotment money of ` 5 per
share. Out of these, 15 shares were reissued to Naresh
as `
7 per share paid-up for ` 8 per
share.
(ii) Y Ltd. forfeited 90 shares of ` 10
each, ` 8 called-up issued at a premium of ` 2 per share
to 'R' for non-payment of allotment money of ` 5 per share
(including premium). Out of these, 80 shares were reissued to Sanjay as ` 8
called-up for ` 10 per share.
Answer:
|
Journal |
|
|||||
|
Date |
Particulars |
L.F. |
Debit Amount ` |
Credit
Amount ` |
||
|
(i) |
Share Capital A/c (20 Shares × 7) |
Dr. |
|
140 |
|
|
|
|
To Share
Forfeiture A/c (20 Shares × 5) |
|
|
|
100 |
|
|
|
To
Calls-in- Arrears A/c (20 Shares × 2) |
|
|
|
40 |
|
|
|
(20 Shares of ` 10 each, ` 7
called-up forfeited for the non-payment of call) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c (15 Shares × 8) |
Dr. |
|
120 |
|
|
|
|
To Share Capital
A/c (15 Shares × 7) |
|
|
|
105 |
|
|
|
To
Securities Premium A/c (15 Shares × 1) |
|
|
|
15 |
|
|
|
(15 shares were reissued as ` 7 paid-up for ` 8 per share) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Forfeiture A/c (15 Shares × 5) |
Dr. |
|
75 |
|
|
|
|
To Capital
Reserve A/c |
|
|
|
75 |
|
|
|
(Transfer of profit on re-issue of 15 shares) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(ii) |
Share Capital A/c (90 Shares × 8) |
Dr. |
|
720 |
|
|
|
|
Securities Premium A/c (90 Shares × 2) |
Dr. |
|
180 |
|
|
|
|
To Share
Forfeiture A/c (90 Shares × 5) |
|
|
|
450 |
|
|
|
To Share Allotment
A/c (90 Shares × 5) |
|
|
|
450 |
|
|
|
(Shares forfeited for non-payment of allotment) |
|
|
|
|
|
|
|
Bank A/c (80 Shares × 10) |
Dr. |
|
800 |
|
|
|
|
To Share
Capital A/c (80 Shares × 8) |
|
|
|
640 |
|
|
|
To
Securities Premium A/c (80 Shares × 2) |
|
|
|
160 |
|
|
|
(80 shares were reissued for ` 10, ` 8 called-up) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Forfeiture A/c (80 Shares × 5) |
Dr. |
|
400 |
|
|
|
|
To Capital
Reserve A/c |
|
|
|
400 |
|
|
|
(Transfer of profit on re-issue of 80 shares) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Working
Notes-
Note 1
Profit on 20 forfeited shares=100
Profit on 15
forfeited shares=100×15/20=75
forfeited shares(Cr.)=75 `.(Cr.)
forfeited shares(Dr.)=Nil
Capital
reserve=75 `.
Note 2
Profit on 90 forfeited shares=450
Profit on 80
forfeited shares=450×80/90=400
forfeited shares(Cr.)=400 `.(Cr.)
forfeited shares(Dr.)=Nil
Capital
reserve=400 `.
Page No 9.120:
Question 59: Jain Ltd. invited
applications for issuing 1,12,000 equity shares of ` 10 each at par.
The amount per share
was
payable as follows:
|
On
Application |
`1 |
|
On
Allotment |
`2 |
|
On
First call |
`3 |
|
On
Second and Final call |
`4 |
Applications
for 1,00,000 shares were received. Shares were fully
allotted to all the applicants. Ramesh
failed to pay his
allotment money which was ` 2,000. His shares were forfeited immediately. Suresh
did
not pay the first
call on 500 shares applied by him. His shares were forfeited after the first
call. The forfeited
shares of Ramesh and
Suresh were reissued at 9 per share fully paid-up. Afterwards the second and
final
call was made and was
duly received.
Pass necessary Journal entries for the above
transactions in the books of Jain Ltd. (CBSE 2019)
Answer:
|
Journal |
|
|||||
|
Date |
Particulars |
L.F. |
Debit Amount ` |
Credit
Amount ` |
||
|
(i) |
Bank A/c (1,00,000 × 1) |
Dr. |
|
1,00,000 |
|
|
|
|
To Equity
share application A/c |
|
|
|
1,00,000 |
|
|
|
(Being Application money received) |
|
|
|
||
|
|
|
|
|
|
|
|
|
|
Equity share application A/c |
Dr. |
|
1,00,000 |
|
|
|
|
To Equity
Share Capital A/c |
|
|
|
1,00,000 |
|
|
|
(Being share application money transferred to share
Capital) |
|
|
|
|
|
|
|
Equity share allotment A/c |
Dr. |
|
2,00,000 |
|
|
|
|
To Equity
Share Capital A/c |
2,00,000 |
||||
|
|
(Being
allotment due) |
|||||
|
|
||||||
|
|
Bank A/c (2,00,000-2,000) |
1,98,000 |
||||
|
To
Equity share allotment A/c |
1,98,000 |
|||||
|
|
(Being allotment money received) |
|||||
|
|
||||||
|
|
Equity Share Capital A/c |
|||||
|
|
To
Equity share allotment A/c |
|||||
|
|
To
Equity share forfeiture A/c |
|||||
|
|
(Being
1000 share of Ramesh forfeited due to non- payment of allotment) |
|||||
|
|
||||||
|
|
Equity share First and final Call A/c |
Dr. |
2,97,000 |
|||
|
|
To Equity
Share Capital A/c (99,000×3) |
2,97,000 |
||||
|
|
(Being
allotment due) |
|||||
|
|
||||||
|
|
Bank A/c (98,500×3) |
2,95,500 |
||||
|
|
To
Equity share allotment A/c |
|
|
|
2,95,500 |
|
|
|
(Being allotment money received except 500 shares of
Suresh) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share Capital A/c (500×6) |
|
|
3,000 |
|
|
|
|
To
Equity share first call A/c
(500×3) |
|
|
|
1,500 |
|
|
|
To
Equity share forfeiture A/c
(500×3) |
|
|
|
1,500 |
|
|
|
(Being
1000 share of Suresh forfeited due to non- payment of first Call) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c (1,000+500×9) |
|
|
13,500 |
|
|
|
|
Equity share forfeiture A/c (1500×1) |
|
|
1,500 |
|
|
|
|
To
Equity Share Capital A/c |
|
|
|
15,000 |
|
|
|
(Being forfeited shares re-issue of Ramesh of 1000
and Suresh 500 and re-issued at 9 fully paid-up) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity share forfeiture A/c (1,000+1,500-1,500) |
|
|
1,000 |
|
|
|
|
To capital
Reserve A/c |
|
|
|
1,000 |
|
|
|
(Being amount transferred to capital reserve) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share Second and final call A/c |
|
|
3,94,000 |
|
|
|
|
To
Equity Share Capital A/c (98,500×4) |
|
|
|
3,94,000 |
|
|
|
(Being
final Call due) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
|
|
3,94,000 |
|
|
|
|
To Equity
Share Second and final call A/c |
|
|
|
3,94,000 |
|
|
|
(Being final call money received) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Page No 9.120:
Question 60:
Software Ltd.
company with registered capital of ` 5,00,000 in shares of ` 10 each
issued 20,000 of such shares payable ` 2 on
application, ` 4 on allotment, ` 2 on first
call ` 2 on final
call. All the money payable on allotment was duly received but on the first
call being made, one shareholder paid the entire balance on his holding of 300
shares and five shareholders with a total holding of 1,000 shares failed to pay
their dues on the first call. These shares were forfeited for non-payment of
first call money. Final call was made and all the money due was received. Later
on, forfeited shares were reissued @ ` 6 per share as fully
paid-up.
Record the above in the company's Journal and prepare the Balance Sheet.
Answer:
Amount
payable as
|
Application |
` |
2 |
|
Allotment |
` |
4 |
|
First Call |
` |
2 |
|
Final Call |
` |
2 |
|
|
|
10 |
|
Books of Software Ltd. |
|||||
|
Date |
Particulars |
L.F. |
Debit Amount ( `) |
Credit Amount ( `) |
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
40,000 |
|
|
|
To Share Application A/c |
|
|
40,000 |
|
|
|
(Share
application money received for 20,000 shares at ` 2 each) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
Application A/c |
Dr. |
|
40,000 |
|
|
|
To Share Capital A/c |
|
|
40,000 |
|
|
|
(Share
application money of 20,000 shares at ` 2 each transferred to Share
Capital) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
Allotment A/c |
Dr. |
|
80,000 |
|
|
|
To Share Capital A/c |
|
|
80,000 |
|
|
|
(Share
allotment due on 20,000 shares at ` 4 each) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
80,000 |
|
|
|
To Share Allotment A/c |
|
|
80,000 |
|
|
|
(Share
allotment money received) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
First Call A/c |
Dr. |
|
40,000 |
|
|
|
To Share Capital A/c |
|
|
40,000 |
|
|
|
(Share
first call due on 20,000 shares at ` 2 each) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
38,600 |
|
|
|
Call-in-Arrears
A/c (1,000×2) |
Dr. |
|
2,000 |
|
|
|
To Share First Call A/c |
|
|
40,000 |
|
|
|
To Calls-in-Advance (300×2) |
|
|
600 |
|
|
|
(Share
first call of ` 2 per share received on 19,000 shares along
with calls-in-advance of 300 shares at ` 2 each and holders of 1,000
shares failed to pay the first call) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
Capital A/c |
Dr. |
|
8,000 |
|
|
|
To Share Forfeiture A/c (1,000×6) |
|
|
6,000 |
|
|
|
To Calls-In-Arrears A/c |
|
|
2,000 |
|
|
|
(1,000
shares of ` 10
each on which ` 8 had called, forfeited for non-payment of
first call ` 2
per share) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
Final Call A/c |
Dr. |
|
38,000 |
|
|
|
To Share Capital A/c |
|
|
38,000 |
|
|
|
(Share
final call due on 19,000 shares at ` 2 each) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
37,400 |
|
|
|
Calls-In-Advance
A/c |
Dr. |
|
600 |
|
|
|
To Share Final Call A/c |
|
|
38,000 |
|
|
|
(Share final
call received from 18,700 shares and calls-in-advance of 300 shares adjusted) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
6,000 |
|
|
|
Share
Forfeiture A/c |
Dr. |
|
4,000 |
|
|
|
To Share Capital A/c |
|
|
10,000 |
|
|
|
(1,000
shares, re-issued at ` 6 per share as fully paid-up) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
Forfeiture A/c |
Dr. |
|
2,000 |
|
|
|
To Capital Reserve A/c |
|
|
2,000 |
|
|
|
(Balance
of Share Forfeiture Account after re-issue transferred to Capital Reserve) |
|
|
|
|
|
|
|
|
|
|
|
As per the Schedule III of Companies Act, 2013, the
Company's Balance Sheet is presented as follows.
|
Software Ltd. |
||
|
Balance Sheet |
||
|
Particulars |
Note No. |
Amount ( `) |
|
I. Equity
and Liabilities |
|
|
|
1.
Shareholders’ Funds |
|
|
|
a. Share
Capital |
1 |
2,00,000 |
|
b.
Reserves and Surplus |
2 |
2,000 |
|
2.
Non-Current Liabilities |
|
|
|
3. Current
Liabilities |
|
|
|
Total |
|
2,02,000 |
|
|
|
|
|
II. Assets |
|
|
|
1.
Non-Current Assets |
|
|
|
2. Current
Assets |
|
|
|
a. Cash
and Cash Equivalents |
3 |
2,02,000 |
|
Total |
|
2,02,000 |
NOTES TO ACCOUNTS
|
|
||
|
Note No. |
Particulars |
Amount ( `) |
|
1 |
Share
Capital |
|
|
|
Authorised Share
Capital |
|
|
|
50,000
shares of ` 10 each |
5,00,000 |
|
|
Issued
Share Capital |
|
|
|
20,000
shares of ` 10 each |
2,00,000 |
|
|
Subscribed,
Called-up and Paid-up Share Capital |
|
|
|
20,000
shares of ` 10 each |
2,00,000 |
|
|
|
|
|
2 |
Reserves
and Surplus |
|
|
|
Capital
Reserve |
2,000 |
|
|
|
|
|
3 |
Cash and
Cash Equivalents |
|
|
|
Cash at
Bank |
2,02,000 |
|
|
|
|
Working
Notes:
|
Share
Forfeiture Credit (at the
time of forfeiture of shares) |
6,000 |
|
Less: Share
Forfeiture Debit (at the time of re-issue shares) |
4,000 |
|
Balance in
Share Forfeiture Account after re-issue of shares |
2,000 |
Capital
Reserve = Balance in Share Forfeiture Account of re-issued shares = ` 2,000
Click below for More solutions