12th | Ts grewal 2022-2023 Question 53 to 56 | Share Capital - Company Accounting

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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Chapter-9: Company Accounting-Share Capital  | 2022-2023

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