Question 89:
JJK 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:
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Books of JJK Ltd. Journal |
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Date |
Particulars |
L.F. |
Debit ₹ |
Credit ₹ |
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Share Capital A/c (100 × 8) |
Dr. |
|
800 |
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Securities Premium A/c (100 × 2) |
Dr. |
|
200 |
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To Share Forfeiture A/c (100 × 5) |
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|
500 |
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To Calls-in-Arrears A/c (100 × 5) |
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|
500 |
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(100 shares of ₹10 each, ₹8 called-up with premium ₹2 per share, forfeited for the non-payment of ₹5 each including ₹2 premium) |
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Bank A/c |
Dr. |
|
490 |
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Share Forfeiture A/c |
Dr. |
|
70 |
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To Share Capital A/c |
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560 |
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(70 shares of ₹10 each re-issued at ₹7 per share, ₹8 paid-up) |
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Share Forfeiture A/c |
Dr. |
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280 |
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To Capital Reserve A/c |
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280 |
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(Balance of 70 shares re-issued shares in Share Forfeiture Account transferred to Capital Reserve) |
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Working Note-
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Share Forfeiture Credit |
5 |
per share |
|
Less: Share Forfeiture Debit |
1 |
per share |
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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
Question 90:
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.
(CBSE 2011 C)
Answer:
|
Application |
₹ |
5 |
|
|
Allotment |
₹ |
3 |
(1+2) |
|
First and Final Call |
₹ |
4 |
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|
12 |
(10+2) |
Called-up = Application + Allotment
= ₹5 + 3 (including premium ₹2)
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Book of JCV Limited Journal |
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|
Date |
Particulars |
L.F. |
Debit ₹ |
Credit ₹ |
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Share Capital A/c (200×6) |
Dr. |
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1,200 |
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Securities Premium A/c (200×2) |
Dr. |
|
400 |
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To Share Forfeiture A/c (200×5) |
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|
1,000 |
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To Calls-in-Arrears A/c (200×3) |
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|
600 |
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(200 shares of ₹10 each on which ₹8 had called (including ₹2 premium), forfeited for the non-payment of allotment ₹3 (including ₹2 premium) |
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Bank A/c |
Dr. |
|
800 |
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Share Forfeiture A/c |
Dr. |
|
200 |
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To Share Capital A/c |
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|
1,000 |
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(100 shares of ₹10 each re-issued at ₹8 per share fully paid-up) |
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Share Forfeiture A/c |
Dr. |
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300 |
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To Capital Reserve |
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300 |
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(Amount of share forfeiture of 100 re-issued shares transferred to Capital Reserve) |
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Working Note
Share Forfeiture of Re-issued Shares
|
Share Forfeiture (at the time of forfeiture) |
Cr. |
5 |
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Share Forfeiture (at the time of re-issue) |
Dr. |
2 |
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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
Question 91:
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. (CBSE
2013 C)
Answer:
|
Journal |
|
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Date |
Particulars |
L.F. |
Debit ₹ |
Credit ₹ |
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|
Equity Share Capital A/c (8×1,000) |
Dr. |
|
8,000 |
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Securities Premium A/c (2×1,000) |
Dr. |
|
2,000 |
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To Share Forfeiture A/c |
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|
5,000 |
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To Calls-in-Arrears |
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|
5,000 |
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(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) |
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Bank A/c (12×800) |
Dr. |
|
9,600 |
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To Share Capital A/c |
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|
8,000 |
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To Securities Premium A/c |
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1,600 |
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(800 shares reissued at ₹12 fully paid up) |
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Bank A/c (11×200) |
Dr. |
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2,200 |
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To Share Capital A/c |
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2,000 |
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To Securities Premium A/c |
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200 |
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(200 shares reissued at ₹11 fully paid up) |
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Share Forfeiture A/c |
Dr. |
|
5,000 |
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To Capital Reserve A/c |
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5,000 |
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(Prof it on reissue transferred to capital reserve) |
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Question 92:
Gaurav
applied for 5,000 shares of ₹10 each at a premium of 2.50 per share.
But he was allotted only 2,500 shares on pro rata basis . After having
paid ₹3 per share on
application, he did not pay allotment money of ₹4.50 per share
(including premium) and on his subsequent failure to pay the first call of
₹2 per share, his
shares were forfeited. These shares were reissued at the rate of ₹8 per share credited
as fully paid .
Pass journal entries to record the forfeiture and reissue of shares.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit (₹) |
Credit (₹) |
|
|
|
Equity Share Capital A/c (2,500×7) |
Dr. |
|
17,500 |
|
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Security Premium Reserve A/c |
Dr. |
|
3,750 |
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To Equity Share Allotment A/c |
|
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|
3,750 |
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To Equity Share First Call A/c (2,500×2) |
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5,000 |
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To Share Forfeited A/c |
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12,500 |
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(2,500 shares forfeited) |
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Bank A/c (2,500×8) |
Dr. |
|
20,000 |
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Share Forfeited A/c (2,500×2) |
Dr. |
|
5,000 |
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To Equity Share Capital A/c (2,500×10) |
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25,000 |
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(Share reissued @₹8 per share fully paid-up) |
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Share Forfeited A/c (12,500 – 5,000) |
Dr. |
|
7,500 |
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To Capital Reserve A/c |
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7,500 |
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(Prof it on reissue transferred to Capital Reserve) |
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Working Notes:
WN 1: Calculation of Amount unpaid on Allotment
Amount received on application (5,000×3) = 15,000
Less: Amount adjusted on application (2,500×3) = 7,500
Excess amount received on application = 7,500
Amount due on allotment (2,500×4.5) = 11,250
Amount unpaid on allotment = 3,750 (11,250 – 7,500)
Note:
₹7,500 received on application will be transferred to allotment, but first of all we have to transfer such amount to Capital A/c and rest would be transferred to Securities Premium A/c. Capital on allotment is ₹5,000 (2,500×2) that is fully received and balance amount of advance ₹2,500 will be transferred to Securities Premium A/c. So, amount of premium unpaid is ₹3,750 (2,500×2.5 –2,500).
Ts Grewal Solution 2026-2027
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Class 12 / Volume – 2
Chapter 1- Company Accounts- Accounting for Share Capital
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