12th | Accounting for Share Capital | Question No. 69 To 72 | Ts Grewal Solution 2025-2026

Question 69:

R.P Ltd. forfeited 1,500 shares of Rahim of ₹10 each issued at a premium of ₹3 per share for non-payment of allotment and first call money. Rahim had applied for 3,000 shares. On these shares, amount was payable as follows:

On application	₹3 per share,
On allotment (including premium)	₹5 per share,
On first call	₹3 per share,
On final call Balance.

Final call has not been called up. 1,000 of the forfeited shares were reissued for ₹8,500 as fully paid-up.

Record the necessary Journal entries for the above transactions in the books of R.P. Ltd. (CBSE 2020)

Answer:


Journal
Date	Particulars		L.F.	Debit ₹	Credit ₹


1500*8	Equity Share Capital A/c	Dr.		12,000
1500*3	Securities Premium Reserve A/c			4,500
1500	To Share Forfeiture A/c				4,500
1500*5	To Share Allotment Call A/c				7,500
1500*3	To Share First Call A/c				4,500
	(100 shares of ₹10 each forfeited for the non-payment of two calls of ₹2.5 each)

	Bank A/c	Dr.		8,500
	Share Forfeiture A/c	Dr.		1,500
1,000*10	To Equity Share Capital A/c				10,000
	(100 shares of ₹10 each reissued at ₹8 per share, fully paid-up)

	Share Forfeiture A/c	Dr.
	To Capital Reserve A/c
	(Balance in Share Forfeiture Account after re-issue of shares, transferred to Capital Reserve)

Question 70:

The Hindustan Manufacturing Ltd. had a total subscribed capital of ₹10,00,000 in Equity Shares of ₹10 each of which ₹7.50 were called-up. A final call of ₹2.50 was made and all amount paid except two calls of ₹2.50 each in respect of 100 shares held by D . These shares were forfeited and reissued at ₹8 per share .
Pass necessary journal entries (including that of cash) to record the transactions of final call , forfeiture of shares and reissue of forfeited shares . Also, prepare the Balance Sheet of the company.

Answer:

Books of Hindustan Manufacturing Limited
Journal
Date	Particulars		L.F.	Debit ₹	Credit ₹

	Equity Share Final Call A/c	Dr.		2,50,000
	To Equity Share Capital A/c				2,50,000
	(Share Final Call due on 1,00,000 shares at ₹2.5 per share)

	Bank A/c	Dr.		2,49,750
	Calls-in-Arrears A/c	Dr.		250
	To Equity Share Final Call A/c				2,50,000
	(Share Final Call of ₹2.5 per share received from 99,900 shares and 100 shares did not pay it)

	Equity Share Capital A/c	Dr.		1,000
	To Share Forfeiture A/c				500
	To Calls-in-Arrears A/c				500
	(100 shares of ₹10 each forfeited for the non-payment of two calls of ₹2.5 each)

	Bank A/c	Dr.		800
	Share Forfeiture A/c	Dr.		200
	To Equity Share Capital A/c				1,000
	(100 shares of ₹10 each reissued at ₹8 per share, fully paid-up)

	Share Forfeiture A/c	Dr.		300
	To Capital Reserve A/c				300
	(Balance in Share Forfeiture Account after re-issue of shares, transferred to Capital Reserve)

As per the Schedule III of Companies Act, 2013, the Company's Balance Sheet is presented as follows.

Hindustan Manufacturing Ltd.
Balance Sheet
Particulars	Note No.	(₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital	1	10,00,000
b. Reserves and Surplus	2	300
2. Non-Current Liabilities
3. Current Liabilities
Total		10,00,300

II. Assets
1. Non-Current Assets
2. Current Assets
a. Cash and Cash Equivalents	3	10,00,300
Total		10,00,300

NOTES TO ACCOUNTS


Note No.	Particulars	(₹)
1	Share Capital
	Authorised Share Capital
	1,00,000 shares of ₹10 each	10,00,000
	Issued Share Capital
	1,00,000 shares of ₹10 each	10,00,000
	Subscribed, Called-up and Paid-up Share Capital
	1,00,000 shares of ₹10 each	10,00,000

2	Reserves and Surplus
	Capital Reserve	300

3	Cash and Cash Equivalents
	Cash at Bank	10,00,300

Working Notes:

Share Forfeiture Credit (100 shares × ₹5 each)	500
Less: Share Forfeiture Debit (100 share × ₹2 each)	200	Loss on re-issue
Balance in Share Forfeiture Account after re-issue	300

Capital Reserve = Balance in Share Forfeiture Account after re-issue = ₹300

Question 71:

Star Ltd. forfeited 500 Equity Shares of ₹100 each for non-payment of first call of ₹30 per share . The final call of ₹10 per share was not yet made. Out of these, 60% shares were reissued for ₹39,000 fully paid. journalise the forfeiture and reissue of shares.

Answer:

Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Equity Share Capital A/c (500×90)	Dr.		45,000
	To Equity Share 1^st Call A/c (500×30)				15,000
	To Share Forfeited A/c (500×60)				30,000
	(500 equity shares forfeited for non-payment of final call)

	Bank A/c (300×130)	Dr.		39,000
	To Equity Share Capital A/c (300×100)				30,000
	To Security Premium Reserve A/c (300×30)				9,000
	(300 shares are reissued @130 per share)

	Share Forfeited A/c	Dr.		18,000
	To Capital Reserve A/c				18,000
	(Prof it on reissue of 300 shares transferred to Capital Reserve)

Working Note:

Amount transferred to Capital Reserve

Shares Re-issued = 300

Shares Forfeited = 500

Amount forfeited in respect of 300 shares = Amount Forfeited × Shares Re-issued Shares Forfeited

= 30,000×300500=18,000

Question 72:

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

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