Question 93:
Amal had applied for 7,000 shares of ₹10 each at a premium of ₹5 per share. He was allotted 4,000 shareson pro rata basis. After having paid ₹3 per share on application, he did not pay allotment money of ₹7 per share (including premium) and on his subsequent failure to pay the first call of ₹3 per share, hisshares were forfeited. Calls not received were transferred to Calls-in-Arrears Account. These shares werereissued at the rate of 8 per share credited as fully paid.
Pass Journal entries to record the forfeiture and reissue of shares.
Answer:
Aman Applied Capital 7,000 shares of ₹10 each
Allotted 4,000 shares
Payable as:
|
₹ |
3 |
On application |
|
₹ |
7 |
On allotment (With ₹5 Premium) |
|
₹ |
3 |
On first and final call |
|
₹ |
2 |
On first and final call |
|
15 |
|
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit (₹) |
Credit (₹) |
|
|
|
Share Capital A/c (4,000×8) |
Dr. |
|
32,000 |
|
|
|
To Forfeited Shares A/c |
|
|
|
21,000 |
|
|
To Calls-In-Arrears A/c (4,000×3) |
|
|
|
11,000 |
|
|
(Being share forfeited for Non Payment of allotment and First Call of 4,000 shares) |
|
|
|
|
|
|
Bank A/c (4,000×8) |
Dr. |
|
32,000 |
|
|
|
Forfeited Shares A/c (4,000×2) |
|
|
8,000 |
|
|
|
To Share Capital A/c (4,000×10) |
|
|
|
40,000 |
|
|
(Being 4,000 shares forfeited reissued at the rate of ₹8 per share credited as fully paid) |
|
|
|
|
|
|
Forfeited Shares A/c |
Dr. |
|
13,000 |
|
|
|
To Capital Reserve A/c |
|
|
|
13,000 |
|
|
(Being full amount Forfeited on 2,000 Shares reissued, transferred to Capital Reserve) |
|
|
|
|
|
|
|
|
|
|
|
Question 94:
Pass necessary Journal entries for forfeiture and reissue of shares in the following cases:
(i) Neon Ltd. forfeited 2,000 shares of ₹10 each issued at a premium of ₹2 per share for non-payment of allotment money of ₹5 per share (including premium). The first and final call of ₹2 per share was not yet made. Out of these, 1,500 shares were reissued at ₹7 per share, ₹8 paid-up.
(ii) Mamta Ltd. forfeited 3,000 shares of ₹10 each on which the first call of ₹3 per share was not received.
The second and final call of ₹1 per share was not yet called. Out of these, 2,000 shares were reissued at ₹9 per share, ₹9 paid-up.
(CBSE 2024)
Answer:
Case 1:
|
Application |
5 |
|
Allotment |
₹5 (₹3+₹2) |
|
1st and Final call |
₹2 |
|
|
Books of Neon Ltd. Journal |
|
|||||
|
Date |
Particulars |
|
L.F. |
Debit (₹) |
Credit (₹) |
|
|
|
|
Share Capital A/c (2,000×8) |
Dr. |
16,000 |
|
|||
|
|
Securities Premium Reserves A/c (2,000×2) |
Dr. |
|
4,000 |
|
||
|
To Share forfeited A/c (2,000×5) |
|
10,000 |
|
||||
|
To Share Allotment A/c (2,000×5) |
|
10,000 |
|
||||
|
|
(Being 2,000 shares forfeited for non-allotment due on at ₹ 5 each including premium) |
|
|
||||
|
Bank A/c (1,500×7) |
Dr. |
10,500 |
|
||||
|
Share forfeited A/c (1,500×1) |
Dr. |
1,500 |
|
||||
|
To Share Capital A/c (1,500×8) |
|
12,000 |
|
||||
|
(Being 1,500 forfeited shares were reissued @ ₹7 per share for ₹8) |
|
|
|||||
|
Share forfeited A/c |
Dr. |
6,000 |
|
||||
|
To Capital Reserve A/c |
|
6,000 |
|
||||
|
( Being balance in the forfeited amount of 1,500 shares transfer to capital reserve account) |
|
|
|||||
Amount to be transferred to Capital Reserves = 10,000×1,500÷2,000= 7,500
7,500-1,500 (discount on re-issue)=6,000
Case 2:
|
Application and Allotment |
₹6 |
|
First Call |
₹3 |
|
1st and Final call |
₹1 |
|
|
Books of Neon Ltd. Journal |
|
|||||
|
Date |
Particulars |
|
L.F. |
Debit (₹) |
Credit (₹) |
|
|
|
|
Share Capital A/c (3,000×9) |
Dr. |
27,000 |
|
|||
|
To Share forfeited A/c (3,000×6) |
|
18,000 |
|
||||
|
To Share Allotment A/c (3,000×3) |
|
9,000 |
|
||||
|
|
(Being 3,000 shares forfeited for non-payment of First call due on at ₹ 3) |
|
|
||||
|
Bank A/c (2,000×9) |
Dr. |
18,000 |
|
||||
|
To Share Capital A/c (2,000×9) |
|
18,000 |
|
||||
|
(Being 2,000 forfeited shares were reissued @ ₹9 per share for ₹9) |
|
|
|||||
|
Share forfeited A/c |
Dr. |
12,000 |
|
||||
|
To Capital Reserve A/c |
|
12,000 |
|
||||
|
( Being balance in the forfeited amount of 1,500 shares transfer to capital reserve account) |
|
|
|||||
Amount to be transferred to Capital Reserves = 18,000×2,000÷3,000= 12,000
12,000- Nil (discount on re-issue) =12,000
Question 95:
'Telecom
Ltd.' issued 20,000 Equity Shares of ₹10 each at a premium of ₹5 per share,
payable as: ₹7 (including
premium) on application, ₹5 on allotment and the balance after three months
of allotment. A shareholder to whom 200 shares were allotted failed to pay the
allotment and call money and his shares were forfeited. 160 of the forfeited
shares were reissued for ₹1,600.
Give necessary entries in company's Journal and the Balance Sheet.
Answer:
Issued and Applied 20,000 equity shares of ₹10 each at a premium of ₹5
|
Application |
₹ |
7 |
(2+5) |
|
Allotment |
₹ |
5 |
|
|
First and Final Call |
₹ |
3 |
|
|
|
|
15 |
(10+5) per share |
|
Books of Telecom Ltd. |
|||||
|
Date |
Particulars |
L.F. |
Debit (₹) |
Credit (₹) |
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
140,000 |
|
|
|
To Equity Share Application A/c |
|
|
140,000 |
|
|
|
(Share application money received for 20,000 shares at ₹7 each) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share Application A/c |
Dr. |
|
1,40,000 |
|
|
|
To Equity Share Capital A/c |
|
|
40,000 |
|
|
|
To Securities Premium A/c |
|
|
1,00,000 |
|
|
|
(Share application money of 20,000 shares transferred Share Capital at ₹25 per share and Securities Premium at ₹5 per share) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share Allotment A/c |
Dr. |
|
1,00,000 |
|
|
|
To Equity Share Capital A/c |
|
|
1,00,000 |
|
|
|
(Share allotment due on 20,000 shares at ₹5 each) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
99,000 |
|
|
|
Calls-in-Arrears A/c |
Dr. |
|
1,000 |
|
|
|
To Equity Share Allotment A/c |
|
|
1,00,000 |
|
|
|
(Share allotment received on 19,800 shares and a holder of 200 shares failed to pay it) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share First and Final call A/c |
Dr. |
|
60,000 |
|
|
|
To Equity Share Capital A/c |
|
|
60,000 |
|
|
|
(First and final call due on 20,000 shares at ₹3 each) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
59,400 |
|
|
|
Calls-in-Arrears A/c |
Dr. |
|
600 |
|
|
|
To Equity Share First and Final Call A/c |
|
|
60,000 |
|
|
|
(First and final call received on 19,800 shares and a holder of 200 shares failed to pay it) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share Capital A/c |
Dr. |
|
2,000 |
|
|
|
To Share Forfeiture A/c (₹2 × 200 Shares) |
|
|
400 |
|
|
|
To Calls-in-Arrears A/c |
|
|
16,00 |
|
|
|
(200 shares of ₹10 each forfeited for the non-payment amount due ₹8 per share) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
1,600 |
|
|
|
To Equity Share Capital A/c |
|
|
1,600 |
|
|
|
(160 shares of ₹10 each re-issued for the sum of ₹1,600) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Forfeiture A/c |
Dr. |
|
320 |
|
|
|
To Capital Reserve A/c |
|
|
320 |
|
|
|
(Balance in Share Forfeiture of 160 re-issued shares transferred to Capital Reserve) |
|
|
|
|
|
|
|
|
|
|
|
As per the Schedule III of Companies Act, 2013, the Company's Balance Sheet is presented as follows.
|
Telecom Ltd. |
||
|
Balance Sheet |
||
|
Particulars |
Note No. |
Amount (₹) |
|
I. Equity and Liabilities |
|
|
|
1. Shareholders’ Funds |
|
|
|
a. Share Capital |
1 |
1,99,680 |
|
b. Reserves and Surplus |
2 |
1,00,320 |
|
2. Non-Current Liabilities |
|
|
|
3. Current Liabilities |
|
|
|
Total |
|
3,00,000 |
|
|
|
|
|
II. Assets |
|
|
|
1. Non-Current Assets |
|
|
|
2. Current Assets |
|
|
|
a. Cash and Cash Equivalents |
3 |
3,00,000 |
|
Total |
|
3,00,000 |
|
|
|
|
NOTES TO ACCOUNTS
|
|
|||
|
Note No. |
Particulars |
Amount (₹) |
|
|
1 |
Share Capital |
|
|
|
|
Authorised Share Capital |
|
|
|
|
…… Equity Shares of ₹10 each |
- |
|
|
|
Issued Share Capital |
|
|
|
|
20,000 Equity Shares of ₹10 each |
2,00,000 |
|
|
|
Subscribed, Called-up and Paid-up Share Capital |
|
|
|
|
19,960 Equity Shares of ₹10 each |
1,99,600 |
|
|
|
Add: Shares Forfeited (40 shares × ₹2) |
80 |
1,99,680 |
|
|
|
|
|
|
2 |
Reserves and Surplus |
|
|
|
|
Securities Premium |
1,00,000 |
|
|
|
Capital Reserve |
320 |
1,00,320 |
|
|
|
|
|
|
3 |
Cash and Cash Equivalents |
|
|
|
|
Cash at Bank |
3,00,000 |
|
|
|
|
|
|
Working Notes: 1. Share Forfeiture of Re-issued Shares
|
Share Forfeiture (at the time of forfeiture after deducting premium) |
Cr. |
2 |
(7 – 5) |
|
Less: Share Forfeiture (at the time of re-issue) |
Dr. |
NIL |
|
|
Balance in Share Forfeiture after re-issue |
Cr. |
2 |
per share |
Capital Reserve = Balance in Share Forfeiture after reissue (per share) × Number of Shares Re-issued = ₹2 × 160 = ₹320
2. Calculation of balance remaining in Share Forfeiture Account (to be shown in the Balance Sheet)
|
Share Forfeiture (at the time of forfeiture of 200 shares) |
= |
400 |
Debit |
|
Less: Share Forfeiture (at the time re-issue of 160 shares) |
= |
(320) |
Credit |
|
Balance in Share Forfeiture Account (for 40 shares which are not re-issued) |
= |
₹80 |
Debit |
Question 96:
Healthy Foods Ltd. had authorised capital of ₹50,00,000, 5,00,000 equity shares of ₹10 each issued 3,75,000 equity shares for subscription at a premium of 20% payable ₹4 on application, ₹5 on allotment and balance as first and final call. The shares were subscribed, and due amounts were received except allotment money on 25,000 shares. These shares were forfeited. Later these shares were reissued at ₹7 paid-up and ₹50,000 were transferred to Capital Reserve. First and final call was demanded from the shareholders and was received except on 10,000 which was transferred to Calls-in-Arrears Account.
Pass the Journal entries for forfeiture, reissue of forfeited shares and first and final call.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit (₹) |
Credit (₹) |
|
|
|
Share Capital A/c (25,000×7) |
Dr. |
|
1,75,000 |
|
|
|
Securities Premium Reserve A/c (25,000×2) |
|
|
50,000 |
|
|
|
To Forfeited Shares A/c (25,000×4) |
|
|
|
1,00,000 |
|
|
To Calls-In-Arrears A/c (25,000×5) |
|
|
|
1,25,000 |
|
|
(Being share forfeited for Non Payment of allotment) |
|
|
|
|
|
|
Bank A/c (25,000×5) |
Dr. |
|
1,25,000 |
|
|
|
Forfeited Shares A/c (25,000×2) |
Dr. |
|
50,000 |
|
|
|
To Share Capital A/c (25,000×7) |
|
|
|
1,75,000 |
|
|
(Being 25,000 shares forfeited reissued at the rate of ₹5 per share credited as fully paid) |
|
|
|
|
|
|
Forfeited Shares A/c |
Dr. |
|
50,000 |
|
|
|
To Capital Reserve A/c |
|
|
|
50,000 |
|
|
(Being full amount Forfeited on 25,000 Shares reissued, transferred to Capital Reserve) |
|
|
|
|
|
|
Share First and Final Call A/c (3,75,000×3)Dr. |
|
11,25,000 |
|
|
|
|
To Share Capital A/c (3,75,000×3) |
|
|
11,25,000 |
|
|
|
(Being 3,75,000 shares were due on first and final call) |
|
|
|
|
|
|
Bank A/c (3,65,000×3)Dr. |
|
10,95,000 |
|
|
|
|
Share First and Final Call A/c (10,000×3)Dr. |
|
30,000 |
|
|
|
|
To Share Capital A/c (3,75,000×3) |
|
|
11,25,000 |
|
|
|
(Being First and final call was received except on 10,000 shares) |
|
|
|
|
Ts Grewal Solution 2026-2027
Click below for more Questions
Class 12 / Volume – 2
Chapter 1- Company Accounts- Accounting for Share Capital
Question No. 1 To 4
Question No. 5 To 8
Question No. 9 To 12
Question No. 13 To 16
Question No. 17 To 20
Question No. 21 To 24
Question No. 25 To 28
Question No. 29 To 32
Question No. 33 To 36
Question No. 37 To 40
Question No. 41 To 44
Question No. 45 To 48
Question No. 49 To 52
Question No. 53 To 56
Question No. 57 To 60
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Question No. 65 To 68
Question No. 69 To 72
Question No. 73 To 76
Question No. 77 To 80
Question No. 81 To 84
Question No. 85 To 88
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Question No. 93 To 96
Question No. 97 To 100
Question No. 101 To 104
Question No. 105 To 108
Question No. 109 To 112
Question No. 113 To 115