Question 69:
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 70:
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 71:
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 72:
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 `.
Ts Grewal Solution 2024-2025
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Class 12 / Volume – II