Page No 8.119:
Question 56:
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 8.119:
Question 57:
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 8.119:
Question 58:
A holds 100 shares of ` 10 each on which he has
paid ` 1 per share on application.
B holds 200 shares of ` 10 each on which he has paid ` 1 and ` 2 per share
on application and allotment respectively.
C 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 A |
` |
100 |
Cr. |
Share
Forfeiture of 200 shares held by B |
` |
600 |
Cr. |
Share
Forfeiture of 300 shares held by C |
` |
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 8.119:
Question 59:
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
Page No 8.119:
Question 60:
Slow
& Steady Ltd. invited applications for
10,000 Equity Shares of ` 10 each for public
subscription. The amount of these shares was payable as:
On application
` 1 per share, on allotment ` 2 per share, on first call ` 3 per share and on second and final call ` 4 per share.
All sums payable on application, allotment and calls were duly received with
the following exceptions:
(i) A, who held 200 shares,
failed to pay the money on allotments and calls.
(ii) B, to whom 150 shares were allotted, failed to pay the
money on first call and final call.
(iii) C, who held 50 shares, did not pay the amount of second and final
call.
The shares of A, B and C were forfeited and were subsequently
reissued for cash as fully paid-up at a discount of 5%.
Pass necessary Journal entries to record these transactions in the books of X
Ltd.
Answer:
Issued
and Applied 10,000 Shares of ` 10 each
|
|
|
|
|
A |
|
B |
|
C |
|
Paid-up Shares |
Application |
` |
1 |
(10,000 |
|
|
|
|
|
|
= |
10,000) |
Allotment |
` |
2 |
(10,000 |
– |
200 |
|
|
|
|
= |
9,800) |
First
Call |
` |
3 |
(10,000 |
– |
200 |
– |
150 |
|
|
= |
9,650) |
Second
and Final Call |
` |
4 |
(10,000 |
– |
200 |
– |
150 |
– |
50 |
= |
9,600) |
|
|
10 |
|
|
|
|
|
|
|
|
|
Books of Slow and Steady Limited Journal |
|||||
Date |
Particulars |
L.F. |
Debit Amount ( `) |
Credit Amount ( `) |
|
|
|
|
|
|
|
|
Bank
A/c |
Dr. |
|
10,000 |
|
|
To Equity Share
Application A/c |
|
|
10,000 |
|
|
(Share
application received for 10,000 shares at ` 1 each) |
|
|
|
|
|
|
|
|
|
|
|
Equity
Share Application A/c |
Dr. |
|
10,000 |
|
|
To Equity Share Capital
A/c |
|
|
10,000 |
|
|
(Share
application money transferred to Share Capital) |
|
|
|
|
|
|
|
|
|
|
|
Equity
Share Allotment A/c |
Dr. |
|
20,000 |
|
|
To Equity Share Capital
A/c |
|
|
20,000 |
|
|
(Share
allotment due on 10,000 shares at ` 2 each) |
|
|
|
|
|
|
|
|
|
|
|
Bank
A/c |
Dr. |
|
19,600 |
|
|
Calls-In-Arrears
A/c |
Dr. |
|
400 |
|
|
To Equity Share
Allotment A/c |
|
|
20,000 |
|
|
(Share
allotment of ` 2
per share received on 9,800 shares and holder of 200 failed to pay to it) |
|
|
|
|
|
|
|
|
|
|
|
Equity
Share First Call A/c |
Dr. |
|
30,000 |
|
|
To Equity Share Capital |
|
|
30,000 |
|
|
(Share
first call due on 10,000 shares at ` 3 each) |
|
|
|
|
|
|
|
|
|
|
|
Bank
A/c |
Dr. |
|
28,950 |
|
|
Calls-In-Arrears
A/c |
Dr. |
|
1,050 |
|
|
To Equity Shares First
Call A/c |
|
|
30,000 |
|
|
(Share
first call received on 9,650 shares and holders of 350 shares failed to pay
it) |
|
|
|
|
|
|
|
|
|
|
|
Equity
Share Final Call A/c |
Dr. |
|
40,000 |
|
|
To Equity Share Capital
A/c |
|
|
40,000 |
|
|
(Share
final call due on 10,000 shares at ` 4 each) |
|
|
|
|
|
|
|
|
|
|
|
Bank
A/c |
Dr. |
|
38,400 |
|
|
Calls-In-Arrears
A/c |
Dr. |
|
1,600 |
|
|
To Equity Share Final
Call A/c |
|
|
40,000 |
|
|
(Holders
of 9,600 shares paid final call and holders of 400 shares failed to pay it) |
|
|
|
|
|
|
|
|
|
|
|
Equity
Share Capital A/c |
Dr. |
|
2,000 |
|
|
To Share Forfeiture A/c
(200 × 1) |
|
|
200 |
|
|
To Calls-In-Arrears A/c
(200 × 9) |
|
|
1,800 |
|
|
(200
shares held by A on which application money ` 1 was received, forfeited) |
|
|
|
|
|
|
|
|
|
|
|
Equity
Share Capital A/c |
Dr. |
|
1,500 |
|
|
To Share Forfeiture A/c
(150 × 3) |
|
|
450 |
|
|
To Calls-In-Arrears A/c
(150 × 7) |
|
|
1,050 |
|
|
(150
shares of ` 10
each held by B forfeited for the non-payment of two calls `
each) |
|
|
|
|
|
|
|
|
|
|
|
Equity
Share Capital A/c |
Dr. |
|
500 |
|
|
To Share Forfeiture A/c
(50 × 6) |
|
|
300 |
|
|
To Calls-in-Arrears A/c
(50 × 4) |
|
|
200 |
|
|
(50
shares of ` 10
each held by C forfeited for the non-payment of final call ` 4
each) |
|
|
|
|
|
|
|
|
|
|
|
Bank
A/c (400 × 9.5) |
Dr. |
|
3,800 |
|
|
Share
Forfeiture A/c (400 × .5) |
Dr. |
|
200 |
|
|
To Equity Share Capital
A/c |
|
|
4,000 |
|
|
(400
shares of ` 10
each re-issued at ` 9.5
per share as fully paid-up) |
|
|
|
|
|
|
|
|
|
|
|
Share
Forfeiture A/c |
Dr. |
|
750 |
|
|
To Capital Reserve A/c |
|
|
750 |
|
|
(Balance
in Share Forfeiture Account after re-issue transferred to Capital Reserve) |
|
|
|
|
|
|
|
|
|
Working Note:
Share
Forfeiture of 100 shares held by A |
` |
200 |
Cr. |
Share
Forfeiture of 200 shares held by B |
` |
450 |
Cr. |
Share
Forfeiture of 300 shares held by C |
` |
300 |
Cr. |
Total
Share Forfeiture credit (at
the time of cancellation of shares) |
` |
950 |
|
Calculation of Capital Reserve
Total
Share Forfeiture (at the time of cancellation of shares) = ` 950
Less:
Total Share Forfeiture (at the time of re-issue of shares) = ` (200)
Capital Reserve
= ` 750