12th | Accounting for Share Capital | Question No. 73 To 76 | Ts Grewal Solution 2025-2026

Question 73:

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) LightLtd. 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

Question 74:

Rekha holds 100 shares of ₹10 each on which he has paid ₹1 per share on application.
Sunita holds 200 shares of ₹10 each on which he has paid ₹1 and ₹2 per share on application and allotment respectively.
Teenaholds 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 ₹	Credit ₹
	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 Rekha	₹	100	Cr.
Share Forfeiture of 200 shares held by Sunita	₹	600	Cr.
Share Forfeiture of 300 shares held by Teena	₹	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

Question 75:

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 ₹	Credit ₹
(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 prof it 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 prof it on re-issue of 80 shares)

Working Notes-

Note 1
Prof it on 20 forfeited shares=100

Prof it on 15 forfeited shares=100×15/20=75

forfeited shares(Cr.)=75 ₹.(Cr.)

forfeited shares(Dr.)=Nil

Capital reserve=75 ₹.

Note 2
Prof it on 90 forfeited shares=450

Prof it on 80 forfeited shares=450×80/90=400

forfeited shares(Cr.)=400 ₹.(Cr.)

forfeited shares(Dr.)=Nil

Capital reserve=400 ₹.

Question 76:

Jain Ltd. invited applications for issuing 1,12,000 equity shares of ₹10 each at par. The amount per share

was payable as follows:

On Application	₹1
On Allotment	₹2
On First call	₹3
On Second and Final call	₹4

Applications for 1,00,000 shares were received. Shares were fully allotted to all the applicants. Ramesh

failed to pay his allotment money which was ₹2,000. His shares were forfeited immediately. Suresh did

not pay the first call on 500 shares applied by him. His shares were forfeited after the first call. The forfeited

shares of Ramesh and Suresh were reissued at 9 per share fully paid-up. Afterwards the second and final

call was made and was duly received.

Pass necessary Journal entries for the above transactions in the books of Jain Ltd. (CBSE 2019)

Answer:

Journal
Date	Particulars		L.F.	Debit ₹	Credit ₹
(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)

Ts Grewal Solution 2025-2026

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Class 12 / Volume – 2

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Chapter 9- Company Accounts- Accounting for Share Capital