Forfeiture
and Reissued of Shares which were
Allotted on Pro rata
Question
97:
Arvind Ltd. issued 20,000 shares of `10
each at a premium of `2 per share payable as:
On Application `6
On Allotment `3
(including premium)
On First Call `2
On Second and Final Call- `1
Applications were received for 30,000 shares.
Applications for 6,000 shares were rejected and pro rata allotment was made to
the remaining applicants.
Abhay, who was allotted 500 shares failed to pay
allotment money and on his subsequent failure to pay the first call his shares
were forfeited. Of these, 300 shares
were reissued as fully paid-up for `6
per share.
Journalise the transactions to record the forfeiture
and reissue of shares.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit (`) |
Credit (`) |
|
|
|
Share Capital A/c (500×9) |
Dr. |
|
4,500 |
|
|
|
Securities Premium Reserve A/c |
Dr. |
|
900 |
|
|
|
|
|
|
|
|
|
|
To Forfeited Shares A/c
(600×6-100) |
|
|
|
3,500 |
|
|
To Share Allotment A/c |
|
|
|
900 |
|
|
(1,500-600
already paid=900) |
|
|
|
|
|
|
To
Share First and Final A/c (500×2) |
|
|
|
1,000 |
|
|
(Being share forfeited for allotment
and First and Final Calls of 500
shares) |
|
|
|
|
|
|
Bank A/c (300×6) |
Dr. |
|
1,800 |
|
|
|
Forfeited Shares A/c (300×4) |
|
|
1,200 |
|
|
|
To Share Capital A/c (300×10) |
|
|
|
3,000 |
|
|
(Being 300 shares forfeited
reissued at `6 as fully paid-up)
|
|
|
|
|
|
|
Forfeited Shares A/c |
Dr. |
|
900 |
|
|
|
To Capital Reserve A/c |
|
|
|
900 |
|
|
(Being full amount Forfeited on 300
Shares reissued, transferred to Capital Reserve) |
|
|
|
|
|
|
|
|
|
|
|
Working
Note:
Abhay, who was allotted500
shares
And applied
500×20,000÷30,000=600
Money
receive on application from abhay = 600×6=3,600
Question 98:
Alfa Ltd. invited applications for
issuing 75,000 equity shares of `
10 each. The amount was payable as follows:
|
On application and allotment |
— |
` 4 per share , |
|
On first Call |
— |
` 3 per share, |
|
On second and final
Call |
— |
balance. |
Applications for 1,00,000 shares were received. Shares were allotted to all the
applicants on pro rata basis and excess money received with applications
was transferred towards sums due on first call. Vibha who was allotted
750 shares failed to pay the first call . Her shares were immediately forfeited
. Afterwards the second call was made. The amount due on second call was also
received except on 1,000 shares applied by Monika . Her shares were also
forfeited. All the forefited shares were reissued to Mohit for `9,000 as fully paid-up.
Pass necessary journal entries in the Books of
Alfa Ltd. for the above transactions. (CBSE 2015)
Answer:
|
In
the books of Alfa Ltd. Journal
Entry |
|||||
|
Date |
Particulars |
L.F. |
Debit
` |
Credit
` |
|
|
|
Bank A/c |
Dr. |
|
4,00,000 |
|
|
|
To Equity Share Application
and Allotment A/c |
|
|
|
4,00,000 |
|
|
(Application money received on
1,00,000 shares) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share Application and
Allotment A/c |
Dr. |
|
4,00,000 |
|
|
|
To Equity Share Capital A/c |
|
|
|
3,00,000 |
|
|
To Equity Share First Call
A/c |
|
|
|
1,00,000 |
|
|
(Application money transferred to
share capital account and excess money is adjusted in first call account) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share First Call A/c |
Dr. |
|
2,25,000 |
|
|
|
To Equity Share Capital A/c |
|
|
|
2,25,000 |
|
|
(Amount due on first call) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c (2,25,000 – 1,00,000 –
1,250) |
Dr. |
|
1,23,750 |
|
|
|
To Equity Share First Call
A/c |
|
|
|
1,23,750 |
|
|
(Amount received on first call) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share Capital A/c |
Dr. |
|
5,250 |
|
|
|
To Equity Share Forfeiture
A/c |
|
|
|
4,000 |
|
|
To Equity Share First Call
A/c |
|
|
|
1,250 |
|
|
(Vibha’s shares were forfeited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share Second and Final Call
A/c |
Dr. |
|
2,22,750 |
|
|
|
To Equity Share Capital A/c |
|
|
|
2,22,750 |
|
|
(Amount due on second and final
call after forfeiting Vibha’s shares) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c (2,22,750 – 2,250) |
Dr. |
|
2,20,500 |
|
|
|
To Equity Share Second and
Final Call A/c |
|
|
|
2,20,500 |
|
|
(Amount received on second and
final call) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share Capital A/c |
Dr. |
|
7,500 |
|
|
|
To Equity Share Forfeiture
A/c |
|
|
|
5,250 |
|
|
To Equity Share Second and
Final Call A/c |
|
|
|
2,250 |
|
|
(Monika’s shares were forfeited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
9,000 |
|
|
|
Equity Share Forfeiture A/c |
Dr. |
|
6,000 |
|
|
|
To Equity Share Capital A/c |
|
|
|
15,000 |
|
|
(Forfeited shares were reissued
for ` 9,000 as fully paid-up) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share Forfeiture A/c |
Dr. |
|
3,250 |
|
|
|
To Capital Reserve A/c |
|
|
|
3,250 |
|
|
(Excess amount on forfeiture is
transferred to capital reserve) |
|
|
|
|
|
|
|
|
|
|
|
Working Notes:
WN1: Calculation of Amount not received on First Call
Share applied by vibha=1,00,000/75,000×750= 1,000
share
Amount received on 1000 share@4 `. Each= `.
4,000
Amount transferred to share capital
A/c(750×4)=3,000
Excess application and allotment money
received=1000
Amount due on first call @3 `. 2,250
Amount not received on first call
@3=1,250(2,250-1,000)
WN2: Calculation of Amount not received on Second Call
Allotted share to Monika
=75,000×1000/1,00,000=750 shares
Amount not received on second
call=2,250(750×3)
Question 99:
Himalaya Company Limited issued for
public subscription 1,20,000 equity shares of ` 10 each at a premium for ` 2 per share payable as under:
|
With Application |
— |
` 3 per share, |
|
On allotment (including premium) |
— |
` 5 per share, |
|
On First call |
— |
` 2 per share |
|
On Second and Final call |
— |
` 2 per share. |
Applications were received for 1,60,000 shares . Allotment was made on pro
rata basis . Excess money on application were adjusted against the amount
due on allotment.
Rohan to whom 4,800 shares were allotted failed to pay for the two calls. These
shares were subsequently forfeited after the second call was made . All
the shares forfeited were reissued to Teena as fully paid at ` 7 per share.
Record journal entries and show the transactions relating to share capital in
the company's Balance Sheet. (NCERT)
Answer:
|
Books
of Himalaya Company Ltd. Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit (`) |
Credit (`) |
|
|
|
Bank A/c |
Dr. |
|
4,80,000 |
|
|
|
To Share Application A/c |
|
|
4,80,000 |
|
|
|
(Share Application money received
for 1,60,000 shares @ ` 3 per share) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Application A/c |
Dr. |
|
4,80,000 |
|
|
|
To Equity Share Capital A/c |
|
|
3,60,000 |
|
|
|
To Share Allotment A/c |
|
|
1,20,000 |
|
|
|
(Share Application for 1,20,000
shares @ ` 3 per share transferred to Share Capital Account and
remaining amount adjusted to Allotment) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Allotment A/c |
Dr. |
|
6,00,000 |
|
|
|
To Equity Share Capital A/c |
|
|
3,60,000 |
|
|
|
To Securities Premium |
|
|
2,40,000 |
|
|
|
(Share Allotment due on 1,20,000
shares @ ` 5 per share including `
2 Securities Premium) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
4,80,000 |
|
|
|
To Share Allotment A/c |
|
|
4,80,000 |
|
|
|
(Share allotment for 1,20,000
shares @ ` 5 per share received) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share First Call A/c |
Dr. |
|
2,40,000 |
|
|
|
To Equity Share Capital A/c |
|
|
2,40,000 |
|
|
|
(Share First Call due on 1,20,000
shares @ ` 2 per share) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
2,30,400 |
|
|
|
To Share First Call A/c |
|
|
2,30,400 |
|
|
|
(Share First Call received on
1,15,200 shares @ ` 2 per share and 4,800 shares failed to pay) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Final Call A/c |
Dr. |
|
2,40,000 |
|
|
|
To Equity Share Capital A/c |
|
|
2,40,000 |
|
|
|
(Share Final call due on 1,20,000
shares @ ` 2 per share) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
2,30,400 |
|
|
|
To Share Final Call A/c |
|
|
2,30,400 |
|
|
|
(Share Final Call received on
1,15,200 shares @ ` 2 per share and 4,800 shares failed to pay) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share Capital A/c
(4,800×10) |
Dr. |
|
48,000 |
|
|
|
To Share First Call A/c
(4,800×2) |
|
|
|
9,600 |
|
|
To Share Final Call A/c
(4,800×2) |
|
|
|
9,600 |
|
|
To Share Forfeiture A/c
(4,800×6) |
|
|
|
28,800 |
|
|
(4,800 shares forfeited for the
non–payment of First Call and Final
Call) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
33,600 |
|
|
|
Share Forfeiture A/c |
Dr. |
|
14,400 |
|
|
|
To Equity Share Capital |
|
|
|
48,000 |
|
|
(4,800 shares reissued @ ` 7 per share, fully paid–up) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Forfeiture A/c |
Dr. |
|
14,400 |
|
|
|
To Capital Reserve A/c |
|
|
|
14,400 |
|
|
(Share forfeiture balance of 4,800 shares transferred to Capital
Reserve Account) |
|
|
|
|
|
|
|
|
|
|
|
|
Himalaya
Company Limited |
||
|
Balance
Sheet |
||
|
Particulars |
Note
No. |
(`) |
|
I. Equity and Liabilities |
|
|
|
1. Shareholders’ Funds |
|
|
|
a. Share Capital |
1 |
12,00,000 |
|
b. Reserves and Surplus |
2 |
2,54,400 |
|
2. Non-Current Liabilities |
|
|
|
3. Current Liabilities |
|
|
|
Total |
|
14,54,400 |
|
II. Assets |
|
|
|
1. Non-Current Assets |
|
|
|
2. Current Assets |
|
|
|
a. Cash and Cash Equivalents |
3 |
14,54,400 |
|
Total |
|
14,54,400 |
NOTES TO ACCOUNTS
|
Note
No. |
Particulars |
(`) |
|
|
1 |
Share Capital |
|
|
|
|
Authorised Share Capital |
|
|
|
|
…….. shares of `
10 each |
– |
|
|
|
Issued Share Capital |
|
|
|
|
1,20,000 shares of `
10 each |
12,00,000 |
|
|
|
Subscribed, Called-up and Paid-up
Share Capital |
|
|
|
|
1,20,000 shares of `
10 each |
12,00,000 |
|
|
|
|
|
|
|
2 |
Reserves and Surplus |
|
|
|
|
Securities Premium |
2,40,000 |
|
|
|
Capital Reserve |
14,400 |
2,54,400 |
|
|
|
|
|
|
3 |
Cash and Cash Equivalents |
|
|
|
|
Cash at Bank |
14,54,400 |
|
|
|
|
|
|
Question 100:
Saregama Ltd. invited applications for issuing
80,000 equity shares of `100 each at a
premium of `10. The amount
was payable as follows:
On
Application ` 30
On
Allotment ` 30 (including a
premium of ` 10)
On
First Call ` 30
On
Final Call Balance
Applications
of 1,20,000 shares were received.
Allotment was made on pro rata basis to all applicants. Excess money received
on application was adjusted on sums due on allotment. Dhwani, who was allotted
1,600 shares, failed to pay allotment money and Sargam who applied for 6,000
shares did not pay first call money. These shares were forfeited immediately
after first call. 2,000 of these shares
(including all shares of Dhwani were
issued to Tarang for ` 95 per share as
` 80 paid-up.
Pass necessary Journal entries in books of Saregama Ltd. by opening Calls-in-Arrear and
Calls-in-Advance Accounts, if final call has not been made.
(CBSE
Sample Paper 2019)
Answer:
|
In the books of Saregama Ltd. |
|||||
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit (`) |
Credit (`) |
|
|
|
|
|
|
|
|
|
|
Bank A/c (1,20,000×30) |
Dr. |
|
36,00,000 |
|
|
|
To Equity Share application
A/c |
|
|
|
36,00,000 |
|
|
(Being share application money
received) |
|
|
|
|
|
|
Equity Share application A/c |
Dr. |
|
36,00,000 |
|
|
|
To Equity Share Capital A/c |
|
|
|
24,00,000 |
|
To Equity Share Allotment A/c (Being share application money
transferred to share capital and allotment) |
12,00,000 |
||||
|
|
|||||
|
|
Equity Share Allotment A/c
(80,000 × 30) |
Dr. |
36,00,000 |
||
|
|
To Equity Share Capital A/c
(80,000 × 20) |
|
|
|
16,00,000 |
|
To securities premium reserve A/c
(80,000 × 10) |
8,00,000 |
||||
|
|
(Allotment money due) |
|
|||
|
|
|
|
|||
|
|
Bank A/c |
Dr. |
11,76,000 |
||
|
Calls in arrears A/c |
Dr. |
24,000 |
|||
|
|
To Equity Share Allotment
A/c |
|
12,00,000 |
||
|
|
(Allotment money received) |
|
|||
|
|
|
|
|||
|
|
Equity Share First Call A/c (80,000 × 3) |
Dr. |
24,00,000 |
||
|
|
To Equity Share Capital A/c |
|
24,00,000 |
||
|
|
(Call money due) |
|
|||
|
|
|
|
|||
|
|
Bank A/c (1,60,000 × 2) |
Dr. |
22,32,000 |
||
|
Calls in arrears A/c (1600×30) |
Dr. |
48,000 |
|||
|
Calls in arrears A/c (4000×30) |
Dr. |
1,20,000 |
|||
|
|
To Equity Share First Call
A/c |
|
24,00,000 |
||
|
|
(Call money received) |
|
|||
|
|
|
|
|||
|
|
Equity Share Capital A/c |
Dr. |
1,28,000 |
||
|
Securities premium reserve a/c |
Dr. |
16,000 |
|||
|
|
To Calls in arrears A/c (allotment) |
|
24,000 |
||
|
To Calls in arrears A/c (1600×30) |
48,000 |
||||
|
To share forfeited A/c (2400×30) |
72,000 |
||||
|
(Being shares of Dhanwani forfeited) |
|
||||
|
|
|
||||
|
Equity Share Capital A/c (400×95) |
Dr. |
38,000 |
|||
|
To Calls in arrears A/c (400×80) |
32,000 |
||||
|
|
To share forfeited A/c (400×15) |
6,000 |
|||
|
|
(Being shares of Dhanwani forfeited) |
|
|||
|
Share forfeiture A/c [72,000+(400×50)] |
Dr. |
92,000 |
|||
|
To Capital Reserve A/c |
92,000 |
||||
|
(Being balance of forfeiture transferred to Capital reserve) |
|||||
Ts Grewal Solution 2024-2025
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Class 12 / Volume – II