12th | Ts grewal 2021-2022 | Question 66 to 70 | Ch: 1 Company Account: Accounting for share capital


Page No 9.121:

Question 66:

The Directors of a company forfeited 300 shares of  `10 each issued at a premium of  ` 3 per share , for the non-payment of the first call money of  ` 2 per share . The final call of  `2 per share has not been made. Half the forfeited shares were reissued at  `1,500 as fully paid-up. Record the journal entries for the forfeiture and reissue of shares.

Answer:

Journal Entries

Date

Particulars

L.F.

Debit

Amount

 `

Credit

Amount

 `

 

 

 

 

 

 

Share Capital A/c (300 × 8)

Dr.

 

2,400

 

 

To Share Forfeiture A/c (300 × 6)

 

 

1,800

 

To Calls-In-Arrears (300 × 2)

 

 

600

 

(300 shares of  ` 10 each on which   ` 8 had called, forfeited for non-payment  ` 2 per share)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

1,500

 

 

To Share Capital A/c

 

 

1,500

 

(150 shares of  ` 10 each re-issued for the sum of  ` 1,500)

 

 

 

 

 

 

 

 

 

Share Forfeiture A/c

Dr.

 

900

 

 

To Capital Reserve A/c

 

 

900

 

(Balance in Share Forfeiture Account of 150 re-issued shares, transferred to Capital Reserve)

 

 

 

 

 

 

 

 

 

Working Notes

 

Share Forfeiture of Re-issued Shares

Share Forfeiture

(at the time of forfeiture)

Cr.

6

 

Less: Share Forfeiture

 (at the time of re-issue)

Dr.

NIL

 

Balance in Share Forfeiture after re-issue

Cr.

6

per share

Capital Reserve = Balance in Share Forfeiture after reissue (per share) × Number of Shares Reissued

=  ` 6 × 150

=  ` 900

 



Page No 9.121:

Question 67:

X Ltd . forfeited 100 shares of  ` 10 each ( ` 8 called-up) issued at a premium of  ` 2 per share to Rahul, on which he had paid applications money of  ` 5 per share , for non-payment of allotment money of  ` 5 per share (including premium). Out of these, 70 shares were reissued to Sanjay as  ` 8 called-up for  ` 7 per share. Give necessary journal entries relating to forfeiture and reissue of shares.

Answer:

Books of X Limited

Journal

Date

Particulars

L.F.

Debit

Amount

 `

Credit

Amount

 `

 

 

 

 

 

 

Share Capital A/c (100 × 8)

Dr.

 

800

 

 

Securities Premium A/c (100 × 2)

Dr.

 

200

 

 

To Share Forfeiture A/c (100 × 5)

 

 

500

 

To Calls-in-Arrears A/c (100 × 5)

 

 

500

 

(100 shares of  ` 10 each,  ` 8 called-up with premium  ` 2 per share, forfeited for the non-payment of  ` 5 each including  ` 2 premium)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

490

 

 

Share Forfeiture A/c

Dr.

 

70

 

 

To Share Capital A/c

 

 

560

 

(70 shares of  ` 10 each re-issued at  ` 7 per share,  ` 8 paid-up)

 

 

 

 

 

 

 

 

 

Share Forfeiture A/c

Dr.

 

280

 

 

To Capital Reserve A/c

 

 

280

 

(Balance of 70 shares re-issued shares in Share Forfeiture Account transferred to Capital Reserve)

 

 

 

 

 

 

 

 

 

Working Note-

 

Share Forfeiture Credit

5

per share

Less: Share Forfeiture Debit

1

per share

Balance in Share Forfeiture of re-issued shares

4

per share

Capital Reserve = Balance in Share Forfeiture Account of re-issued shares × No. of shares re-issued

= 70 × 4

=  ` 280

 



Page No 9.122:

Question 68:

150 shares of  ` 10 each issued at a premium of  ` 4 per share payable with allotment were forfeited for non-payment of allotment money of  ` 8 per share including premium. The first and final call of  ` 4 per Pass Journal entries in the books of X Ltd. for the above. 

Answer:

 

Date

Particulars

L.F.

Debit

Amount

( `)

Credit

Amount

( `)

 

Share Capital A/c

Dr.

 

900

 

 

Securities Premium A/c

Dr.

 

600

 

 

  To Share Allotment A/c

 

 

1,200

 

  To Share Forfeiture A/c

 

 

300

 

(150 shares of  ` 10 each forfeited for non–payment of allotment money of  ` 8 per share including premium of  ` 4 per share)

 

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

2,250

 

 

  To Share Capital A/c

 

 

1,500

 

  To Securities Premium A/c

 

 

750

 

(150 shares of  ` 10 each reissued for  ` 15 per share fully paid–up)

 

 

 

 

 

 

 

 

 

Share Forfeiture A/c

Dr.

 

300

 

 

  To Capital Reserve A/c

 

 

300

 

(Balance of Share Forfeiture Account transferred to Capital Reserve Account)

 

 

 

 



Page No 9.122:

Question 69:

JCV Ltd., forfeited 200 shares of  ` 10 each issued at a premium of  ` 2 per share for the non-payment of allotment money of  ` 3 per share (including premium). The first and final call of   ` 4 per share has not been made as yet . 50% of the forfeited shares were reissued at  ` 8 per share  as fully paid-up . Pass necessary Journal entries for the forfeiture and reissue of shares.

Answer:

Application

 `

 

5

 

Allotment

 `

 

3

(1+2)

First and Final Call

 `

 

4

 

 

 

12

(10+2)

 

Called-up = Application + Allotment

=  ` 5 + 3 (including premium  ` 2)

 

Book of JCV Limited

Journal

Date

Particulars

L.F.

Debit

Amount

 `

Credit

Amount

 `

 

 

 

 

 

 

Share Capital A/c (200×6)

Dr.

 

1,200

 

 

Securities Premium A/c (200×2)

Dr.

 

400

 

 

To Share Forfeiture A/c (200×5)

 

 

1,000

 

To Calls-in-Arrears A/c (200×3)

 

 

600

 

(200 shares of  ` 10 each on which  ` 8  had called (including  ` 2 premium), forfeited for the non-payment of allotment  ` 3 (including  ` 2 premium)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

800

 

 

Share Forfeiture A/c

Dr.

 

200

 

 

To Share Capital A/c

 

 

1,000

 

(100 shares of  ` 10 each re-issued at  ` 8 per share fully paid-up)

 

 

 

 

 

 

 

 

 

Share Forfeiture A/c

Dr.

 

300

 

 

To Capital Reserve

 

 

300

 

(Amount of share forfeiture of 100 re-issued shares transferred to Capital Reserve)

 

 

 

 

 

 

 

 

 

Working Note

 

Share Forfeiture of Re-issued Shares

Share Forfeiture

(at the time of forfeiture)

Cr.

5

 

Share Forfeiture

(at the time of re-issue)

Dr.

2

 

Balance in Share Forfeiter

(after re-issue)

Cr.

3

per share

Capital Reserve

= Amount of share forfeitureTotal shares forfeited×Shares reissued - Loss on reissue of forfeited shares=1000200×100-100×2 =500-200=300

 



Page No 9.122:

Question 70:

Pass necessary journal entries in the books of the company for the following transactions:
Vishesh Ltd. forfeited 1,000 Equity Shares of  ` 10 each issued at a premium of  ` 2 per share for non-payment of allotment money of  ` 5 per share including premium. The final call of  ` 2 per share was not yet called on these shares. Of the forfeited shares 800 shares were reissued at  ` 12 per share as fully paid-up.
The remaining shares were reissued at  ` 11 per share fully paid-up.

Answer:

 

Journal
In the books of Vishesh Ltd.

 

Date

Particulars

L.F.

Debit

Amount

 `

Credit Amount

 `

 

Equity Share Capital A/c (8×1,000)

Dr.

 

8,000

 

 

Securities Premium A/c (2×1,000)

Dr.

 

2,000

 

 

To Share Forfeiture A/c

 

 

 

5,000

 

    To Calls-in-Arrears

 

 

 

5,000

 

(1,000 shares of  ` 10 each issued at premium of  ` 2 forfeited for non-payment of allotment money of  ` 5 including premium, final call of  ` 2 not yet made)

 

 

 

 

 

 

 

 

 

 

 

Bank A/c (12×800)

Dr.

 

9,600

 

 

To Share Capital A/c

 

 

 

8,000

 

   To Securities Premium A/c

 

 

 

1,600

 

(800 shares reissued at  ` 12 fully paid up)

 

 

 

 

 

 

 

 

 

 

 

Bank A/c (11×200)

Dr.

 

2,200

 

 

To Share Capital A/c

 

 

 

2,000

 

   To Securities Premium A/c

 

 

 

200

 

(200 shares reissued at  ` 11 fully paid up)

 

 

 

 

 

 

 

 

 

 

 

Share Forfeiture A/c

Dr.

 

5,000

 

 

To Capital Reserve A/c

 

 

 

5,000

 

(Profit on reissue transferred to capital reserve)