Page No 8.118:
Question 51:
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
Page No 8.118:
Question 52:
The
Hindustan Manufacturing Ltd. had a total subscribed capital of ` 10,00,000 in Equity Shares of ` 10 each of which `
7.50 were called-up. A final call of ` 2.50 was
made and all amount paid except two calls of ` 2.50 each in respect of 100 shares held by D
. These shares were forfeited and reissued at ` 8 per share .
Pass necessary journal entries (including that of cash) to record the
transactions of final call , forfeiture of shares and reissue of forfeited
shares . Also, prepare the Balance Sheet of the company.
Answer:
Books of Hindustan Manufacturing Limited |
|||||
Journal |
|||||
Date |
Particulars |
L.F. |
Debit Amount ` |
Credit Amount ` |
|
|
|
|
|
|
|
|
Equity
Share Final Call A/c |
Dr. |
|
2,50,000 |
|
|
To Equity Share Capital
A/c |
|
|
2,50,000 |
|
|
(Share
Final Call due on 1,00,000 shares at ` 2.5 per share) |
|
|
|
|
|
|
|
|
|
|
|
Bank
A/c |
Dr. |
|
2,49,750 |
|
|
Calls-in-Arrears
A/c |
Dr. |
|
250 |
|
|
To Equity Share Final
Call A/c |
|
|
2,50,000 |
|
|
(Share
Final Call of ` 2.5
per share received from 99,900 shares and 100 shares did not pay it) |
|
|
|
|
|
|
|
|
|
|
|
Equity
Share Capital A/c |
Dr. |
|
1,000 |
|
|
To Share Forfeiture A/c |
|
|
500 |
|
|
To Calls-in-Arrears A/c |
|
|
500 |
|
|
(100
shares of ` 10
each forfeited for the non-payment of two calls of ` 2.5
each) |
|
|
|
|
|
|
|
|
|
|
|
Bank
A/c |
Dr. |
|
800 |
|
|
Share
Forfeiture A/c |
Dr. |
|
200 |
|
|
To Equity Share Capital
A/c |
|
|
1,000 |
|
|
(100
shares of ` 10
each reissued at ` 8
per share, fully paid-up) |
|
|
|
|
|
|
|
|
|
|
|
Share
Forfeiture A/c |
Dr. |
|
300 |
|
|
To Capital Reserve A/c |
|
|
300 |
|
|
(Balance
in Share Forfeiture Account after re-issue of shares, transferred to Capital
Reserve) |
|
|
|
|
|
|
|
|
|
As per the Schedule III
of Companies Act, 2013, the Company's Balance Sheet is presented as follows.
Hindustan Manufacturing Ltd. |
||
Balance Sheet |
||
Particulars |
Note No. |
Amount ( `) |
I. Equity and Liabilities |
|
|
1. Shareholders’ Funds |
|
|
a. Share Capital |
1 |
10,00,000 |
b. Reserves and Surplus |
2 |
300 |
2. Non-Current
Liabilities |
|
|
3. Current Liabilities |
|
|
Total |
|
10,00,300 |
|
|
|
II. Assets |
|
|
1. Non-Current Assets |
|
|
2. Current Assets |
|
|
a. Cash and Cash
Equivalents |
3 |
10,00,300 |
Total |
|
10,00,300 |
|
|
|
NOTES TO ACCOUNTS
|
||
Note No. |
Particulars |
Amount ( `) |
1 |
Share Capital |
|
|
Authorised Share
Capital |
|
|
1,00,000 shares of ` 10
each |
10,00,000 |
|
Issued Share Capital |
|
|
1,00,000 shares
of ` 10
each |
10,00,000 |
|
Subscribed, Called-up
and Paid-up Share Capital |
|
|
1,00,000 shares
of ` 10
each |
10,00,000 |
|
|
|
2 |
Reserves and Surplus |
|
|
Capital Reserve |
300 |
|
|
|
3 |
Cash and Cash Equivalents |
|
|
Cash at Bank |
10,00,300 |
|
|
|
Working Notes:
Share
Forfeiture Credit (100 shares × ` 5 each) |
500 |
|
Less: Share Forfeiture Debit (100 share × ` 2
each) |
200 |
Loss
on re-issue |
Balance
in Share Forfeiture Account after re-issue |
300 |
|
Capital
Reserve = Balance in Share Forfeiture Account after re-issue = ` 300
Page No 8.118:
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 Amount ( `) |
Credit Amount ( `) |
|
|
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
Page No 8.118:
Question 54:
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 Amount ` |
Credit Amount ` |
||
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 Amount ` |
Credit Amount ` |
||
|
|
|
|
|
||
|
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
Page No 8.118:
Question 55:
Show
the forfeiture and reissue entries under each of the following cases:
(i) X 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) Y 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 X 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 Y Limited Journal |
||||
Date |
Particulars |
L.F. |
Debit Amount ( `​) |
Credit Amount ( `​) |
|
|
|
|
|
|
|
|
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