Question 53:
Star Ltd.
forfeited 500 Equity Shares of ` 100 each for non-payment of first call
of ` 30 per share . The final call of ` 10 per share was not yet
made. Out of these, 60% shares were reissued for ` 39,000 fully paid. journalise the forfeiture and
reissue of shares.
Answer:
Journal |
|||||
Date |
Particulars |
L.F. |
Debit ( `) |
Credit ( `) |
|
|
Equity Share Capital A/c (500×90) |
Dr. |
|
45,000 |
|
|
To Equity Share 1st Call A/c (500×30) |
|
|
|
15,000 |
|
To Share Forfeited A/c (500×60) |
|
|
|
30,000 |
|
( 500 equity shares forfeited for non-payment of final call) |
|
|
|
|
|
|
|
|
|
|
|
Bank A/c (300×130) |
Dr. |
|
39,000 |
|
|
To Equity Share Capital A/c (300×100) |
|
|
|
30,000 |
|
To Security Premium Reserve A/c (300×30) |
|
|
|
9,000 |
|
(300 shares are reissued @130 per share) |
|
|
|
|
|
|
|
|
|
|
|
Share Forfeited A/c |
Dr. |
|
18,000 |
|
|
To Capital Reserve A/c |
|
|
|
18,000 |
|
( Profit on reissue of 300 shares transferred to Capital Reserve) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working Note:
Amount transferred to Capital Reserve
Shares Re-issued = 300
Shares Forfeited = 500
Amount forfeited in respect of 300 shares = Amount Forfeited ×
Shares Re-issued Shares Forfeited
= 30,000×300500=18,000
Question 54:
Super Star Ltd. makes an issue of 10,000 Equity Shares of ` 100
each, payable as:
On application and allotment |
`
50 per share, |
On first call |
`
25 per share, |
On second and final call |
`
25 per share. |
Members holding 400 shares did not pay the second and final call and the shares
are duly forfeited, 200 of which are reissued as fully paid-up @ ` 50 per share. Pass journal entries
in the books of the company.
Answer:
Book of Super
Star Limited Journal |
|||||
Date |
Particulars |
L.F. |
Debit ` |
Credit ` |
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
5,00,000 |
|
|
To
Equity Share Application and Allotment A/c |
|
|
5,00,000 |
|
|
(Share Application and Allotment money received for
10,000 shares at ` 50 each) |
|
|
|
|
|
|
|
|
|
|
|
Equity Share Application and Allotment A/c |
Dr. |
|
5,00,000 |
|
|
To
Equity Share Capital A/c |
|
|
5,00,000 |
|
|
(Share Application and Allotment money transferred
to Equity Share Capital Account) |
|
|
|
|
|
|
|
|
|
|
|
Equity Share First Call A/c |
Dr. |
|
2,50,000 |
|
|
To
Equity Share Capital A/c |
|
|
2,50,000 |
|
|
(Share First Call due on 10,000 shares of ` 25 each) |
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
2,50,000 |
|
|
To
Equity Share First-Call A/c |
|
|
2,50,000 |
|
|
(First Call money received) |
|
|
|
|
|
|
|
|
|
|
|
Equity Share Final Call A/c |
Dr. |
|
2,50,000 |
|
|
To
Equity Share Capital A/c |
|
|
2,50,000 |
|
|
(Equity Share Final Call due on 10,000 shares of ` 25 each) |
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
2,40,000 |
|
|
Calls-in-Arrears A/c |
Dr. |
|
10,000 |
|
|
To
Equity Share Final Call A/c |
|
|
2,50,000 |
|
|
(Share Final Call of ` 25 per share received on 9,600 shares and holders of 400
shares failed to pay it) |
|
|
|
|
|
|
|
|
|
|
|
Equity Share Capital A/c |
Dr. |
|
40,000 |
|
|
To
Share Forfeiture A/c |
|
|
30,000 |
|
|
To
Calls-In-Arrears A/c |
|
|
10,000 |
|
|
(400 shares of ` 100 each forfeited for the non-payment final call ` 25 per share) |
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
10,000 |
|
|
Share Forfeiture A/c |
Dr. |
|
10,000 |
|
|
To
Equity Share Capital A/c |
|
|
20,000 |
|
|
(200 shares of ` 100 each re-issued at ` 50 per share fully paid-up) |
|
|
|
|
|
|
|
|
|
|
|
Share Forfeiture A/c |
Dr. |
|
5,000 |
|
|
To
Capital Reserve A/c |
|
|
5,000 |
|
|
(Balance in Share Forfeiture of 200 shares of after
re-issue, transferred to Capital Reserve) |
|
|
|
|
|
|
|
|
|
Working Note-
Share Forfeiture |
` |
75 |
Cr. |
Share Forfeiture |
` |
50 |
Dr. |
Balance in Share Forfeiture Account
for re-issued shares |
` |
25 |
Cr. per share |
Capital Reserve = Balance in Share Forfeiture Account for
re-issued shares × Number of Share reissued
= ` 25 × 200 = ` 5,000
Question 55:
Give
necessary journal entries:
(i) The Directors of Devendra
Ltd. resolved on 1st January, 2010 that Equity Shares of ` 10
each, ` 8 paid-up be forfeited for non-payment of final call
of ` 2. On 1st February, 60 of these shares were reissued
@ `
7 per share as fully paid-up.
(ii) Virender Limited forfeited 20
shares of `
100 each( ` 60 called-up) issued at par to Mukesh
on which he had paid ` 20 per
share . Out of these, 15 shares were reissued to Sanjeev as ` 60
paid-up for ` 45 per share.
Answer:
(i) |
Book of Devendra Limited |
|||||
Journal |
||||||
Date |
Particulars |
L.F. |
Debit ` |
Credit ` |
||
2010 |
|
|
|
|
||
Jan. 01 |
Equity
Share Capital A/c |
Dr. |
|
1,000 |
|
|
|
To Share Forfeiture A/c |
|
|
800 |
||
|
To Calls-in-Arrears A/c |
|
|
200 |
||
|
(100
shares of ` 10 each
forfeited for the non-payment of ` 2 per share) |
|
|
|
||
|
|
|
|
|
||
Feb. 01 |
Bank A/c |
Dr. |
|
420 |
|
|
|
Share
Forfeiture A/c |
Dr. |
|
180 |
|
|
|
To Equity Share Capital A/c |
|
|
600 |
||
|
(60 shares
of ` 10 each
re-issued at ` 7 per share, fully paid-up) |
|
|
|
||
|
|
|
|
|
||
|
Share
Forfeiture A/c |
Dr. |
|
300 |
|
|
|
To Capital Reserve A/c |
|
|
300 |
||
|
(Balance
in Share Forfeiture Account of 60 shares after re-issue transferred to
Capital Reserve) |
|
|
|
||
|
|
|
|
|
||
Working
Note:
Forfeiture of re-issued shares
Share Forfeiture Credit |
` |
8 |
per share |
Share Forfeiture Debit |
` |
3 |
per share |
Balance in Share Forfeiture after re-issue |
|
5 |
per share |
General
Reserve = Balance in Share Forfeiture after re-issue (per share) × No.
of shares reissued
= ` 5 × 60
= ` 300
(ii) |
Book of Virender Limited |
|||||
|
Journal |
|||||
Date |
Particulars |
L.F. |
Debit ` |
Credit ` |
||
|
|
|
|
|
||
|
Share
Capital A/c |
Dr. |
|
1,200 |
|
|
|
To Share Forfeiture A/c |
|
|
400 |
||
|
To Calls-in-Arrears A/c |
|
|
800 |
||
|
(20 shares
of ` 100 each ` 60 called-up forfeited for the
non-payment of ` 40 per share) |
|
|
|
||
|
|
|
|
|
||
|
Bank A/c |
Dr. |
|
675 |
|
|
|
Share
Forfeiture A/c |
Dr. |
|
225 |
|
|
|
To Share Capital A/c |
|
|
900 |
||
|
(15 shares
of ` 100 each
re-issued for ` 45 per share as ` 60 paid-up) |
|
|
|
||
|
|
|
|
|
||
|
Share
Forfeiture A/c |
Dr. |
|
75 |
|
|
|
To Capital Reserve A/c |
|
|
75 |
||
|
(Balance
in Share Forfeiture of 15 re-issued shares transferred to Capital Reserve) |
|
|
|
||
|
|
|
|
|
||
Working
Note:
Forfeiture of reissued shares |
|||
Share
Forfeiture Credit (at the time of forfeiture ) |
` |
20 |
per share |
Share
Forfeiture Debit (at the time of re-issue) |
` |
15 |
per share |
Balance in
Share Forfeiture after re-issue |
` |
5 |
per share |
Capital
Reserve = Balance in Share Forfeiture after re-issue (per share) × No.
of shares reissued
= ` 5 × 15
Shares
= ` 75
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 ( ` ) |
Credit ( ` ) |
||
|
|
|
|
|
||
|
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 ( ` ) |
Credit ( ` ) |
||
|
|
|
|
|
||
|
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
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