12th | Accounting for Share Capital | Question No. 85 To 88 | Ts Grewal Solution 2025-2026

Question 85:

The Directors of a company forfeited 300 shares of ₹10 each issued at a premium of ₹3 per share , for the non-payment of the first call money of ₹2 per share . The final call of ₹2 per share has not been made. Half the forfeited shares were reissued at ₹1,500 as fully paid-up. Record the journal entries for the forfeiture and reissue of shares.

(CBSE 2009)

Answer:

Journal Entries
Date	Particulars		L.F.	Debit ₹	Credit ₹

	Share Capital A/c (300 × 8)	Dr.		2,400
	To Share Forfeiture A/c (300 × 6)				1,800
	To Calls-In-Arrears (300 × 2)				600
	(300 shares of ₹10 each on which ₹8 had called, forfeited for non-payment ₹2 per share)

	Bank A/c	Dr.		1,500
	To Share Capital A/c				1,500
	(150 shares of ₹10 each re-issued for the sum of ₹1,500)

	Share Forfeiture A/c	Dr.		900
	To Capital Reserve A/c				900
	(Balance in Share Forfeiture Account of 150 re-issued shares, transferred to Capital Reserve)

Working Notes

Share Forfeiture of Re-issued Shares

Share Forfeiture

(at the time of forfeiture)

Cr.

Less: Share Forfeiture

(at the time of re-issue)

Dr.

NIL

Balance in Share Forfeiture after re-issue

Cr.

per share

Capital Reserve = Balance in Share Forfeiture after reissue (per share) × Number of Shares Reissued

= ₹6 × 150

= ₹900

Question 86:

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:

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

	Share Capital A/c (100 × 8)	Dr.		800
	Securities Premium A/c (100 × 2)	Dr.		200
	To Share Forfeiture A/c (100 × 5)				500
	To Calls-in-Arrears A/c (100 × 5)				500
	(100 shares of ₹10 each, ₹8 called-up with premium ₹2 per share, forfeited for the non-payment of ₹5 each including ₹2 premium)

	Bank A/c	Dr.		490
	Share Forfeiture A/c	Dr.		70
	To Share Capital A/c				560
	(70 shares of ₹10 each re-issued at ₹7 per share, ₹8 paid-up)

	Share Forfeiture A/c	Dr.		280
	To Capital Reserve A/c				280
	(Balance of 70 shares re-issued shares in Share Forfeiture Account transferred to Capital Reserve)

Working Note-

Share Forfeiture Credit	5	per share
Less: Share Forfeiture Debit	1	per share
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 87:

150 shares of ₹10 each issued at a premium of ₹4 per share payable with allotment were forfeited for non-payment of allotment money of ₹8 per share including premium. The first and final call of ₹4 per Pass Journal entries in the books of X Ltd. for the above. (NCERT, Modified)

Answer:


Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Share Capital A/c	Dr.		900
	Securities Premium A/c	Dr.		600
	To Share Allotment A/c				1,200
	To Share Forfeiture A/c				300
	(150 shares of ₹10 each forfeited for non–payment of allotment money of ₹8 per share including premium of ₹4 per share)

	Bank A/c	Dr.		2,250
	To Share Capital A/c				1,500
	To Securities Premium A/c				750
	(150 shares of ₹10 each reissued for ₹15 per share fully paid–up)

	Share Forfeiture A/c	Dr.		300
	To Capital Reserve A/c				300
	(Balance of Share Forfeiture Account transferred to Capital Reserve Account)

Question 88:

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
		12	(10+2)

Called-up = Application + Allotment

= ₹5 + 3 (including premium ₹2)

Book of JCV Limited Journal
Date	Particulars		L.F.	Debit ₹	Credit ₹

	Share Capital A/c (200×6)	Dr.		1,200
	Securities Premium A/c (200×2)	Dr.		400
	To Share Forfeiture A/c (200×5)				1,000
	To Calls-in-Arrears A/c (200×3)				600
	(200 shares of ₹10 each on which ₹8 had called (including ₹2 premium), forfeited for the non-payment of allotment ₹3 (including ₹2 premium)

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

	Share Forfeiture A/c	Dr.		300
	To Capital Reserve				300
	(Amount of share forfeiture of 100 re-issued shares transferred to Capital Reserve)

Working Note

Share Forfeiture of Re-issued Shares

Share Forfeiture

(at the time of forfeiture)

Cr.

Share Forfeiture

(at the time of re-issue)

Dr.

Balance in Share Forfeiter

(after re-issue)

Cr.

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

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