Question 89:
Pass necessary journal entries in
the books of the
company for the following transactions:
Vishesh Ltd. forfeited 1,000 Equity 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 final call of ₹2 per share was
not yet called on these shares. Of the forfeited shares 800 shares were
reissued at ₹12 per share as fully paid-up.
The remaining shares were reissued at ₹11 per share fully paid-up. (CBSE 2013 C)
Answer:
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Journal |
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Date |
Particulars |
L.F. |
Debit ₹ |
Credit ₹ |
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Equity Share Capital A/c (8×1,000) |
Dr. |
|
8,000 |
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Securities Premium A/c (2×1,000) |
Dr. |
|
2,000 |
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To Share Forfeiture A/c |
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|
5,000 |
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To
Calls-in-Arrears |
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|
5,000 |
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(1,000 shares of ₹10 each issued at premium of ₹2 forfeited for non-payment of allotment money of ₹5 including premium, final call of ₹2 not yet made) |
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Bank A/c (12×800) |
Dr. |
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9,600 |
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To Share Capital A/c |
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|
8,000 |
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To Securities Premium A/c |
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1,600 |
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(800 shares reissued at ₹12 fully
paid up) |
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Bank A/c (11×200) |
Dr. |
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2,200 |
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To Share Capital A/c |
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2,000 |
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To Securities Premium A/c |
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200 |
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(200 shares reissued at ₹11 fully
paid up) |
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Share Forfeiture A/c |
Dr. |
|
5,000 |
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To Capital Reserve A/c |
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5,000 |
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(Prof it on reissue transferred to
capital reserve) |
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Question 90:
Gaurav applied for 5,000 shares of ₹10 each at a
premium of 2.50 per share. But he was
allotted only 2,500 shares on pro rata basis .
After having paid ₹3 per share on application, he did not pay allotment money of ₹4.50
per share (including premium) and on his subsequent failure to pay the first
call of ₹2 per share, his shares were forfeited. These shares were
reissued at the rate of ₹8
per share credited as fully paid .
Pass journal entries to record the forfeiture and reissue of shares.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit (₹) |
Credit (₹) |
|
|
|
Equity Share Capital A/c (2,500×7) |
Dr. |
|
17,500 |
|
|
|
Security Premium Reserve A/c |
Dr. |
|
3,750 |
|
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To Equity Share Allotment
A/c |
|
|
|
3,750 |
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To Equity Share First
Call A/c (2,500×2) |
|
|
|
5,000 |
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To Share Forfeited A/c |
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|
12,500 |
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(2,500 shares forfeited) |
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Bank A/c (2,500×8) |
Dr. |
|
20,000 |
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Share Forfeited A/c (2,500×2) |
Dr. |
|
5,000 |
|
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To Equity Share Capital A/c
(2,500×10) |
|
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|
25,000 |
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(Share reissued @₹8 per share fully paid-up) |
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Share Forfeited A/c (12,500 –
5,000) |
Dr. |
|
7,500 |
|
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To Capital Reserve A/c |
|
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|
7,500 |
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(Prof it on reissue transferred to
Capital Reserve) |
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Working Notes:
WN 1: Calculation
of Amount
unpaid on Allotment
Amount received on application
(5,000×3) = 15,000
Less: Amount adjusted on application
(2,500×3) = 7,500
Excess
amount received on application = 7,500
Amount due on allotment (2,500×4.5)
= 11,250
Amount unpaid on allotment = 3,750 (11,250 – 7,500)
Note:
₹7,500 received on application will
be transferred to allotment, but first of
all we have to transfer such amount to Capital A/c and rest would be
transferred to Securities Premium A/c. Capital on allotment is ₹5,000 (2,500×2) that is fully
received and balance amount of advance ₹2,500 will be transferred to
Securities Premium A/c. So, amount of premium unpaid is ₹3,750 (2,500×2.5 –2,500).
Question 91:
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 |
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Journal |
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|
Date |
Particulars |
L.F. |
Debit (₹) |
Credit (₹) |
|
|
|
Share Capital A/c (4,000×8) |
Dr. |
|
32,000 |
|
|
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To Forfeited Shares A/c |
|
|
|
21,000 |
|
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To Calls-In-Arrears A/c (4,000×3) |
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|
11,000 |
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(Being share forfeited for Non
Payment of allotment and First Call of
4,000 shares) |
|
|
|
|
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Bank A/c (4,000×8) |
Dr. |
|
32,000 |
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Forfeited Shares A/c (4,000×2) |
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|
8,000 |
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To Share Capital A/c (4,000×10) |
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|
40,000 |
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(Being 4,000 shares forfeited
reissued at the rate of ₹8 per share credited as fully
paid) |
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Forfeited Shares A/c |
Dr. |
|
13,000 |
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To Capital Reserve A/c |
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|
13,000 |
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(Being full amount Forfeited on
2,000 Shares reissued, transferred to Capital Reserve) |
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Question 92:
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 |
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|
Date |
Particulars |
|
L.F. |
Debit (₹) |
Credit (₹) |
|
|
|
|
Share Capital A/c (2,000×8) |
Dr. |
16,000 |
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Securities Premium Reserves A/c
(2,000×2) |
Dr. |
|
4,000 |
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To Share forfeited A/c (2,000×5) |
|
10,000 |
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To Share Allotment A/c (2,000×5) |
|
10,000 |
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(Being 2,000 shares forfeited for
non-allotment due on at ₹ 5 each including premium) |
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Bank A/c (1,500×7) |
Dr. |
10,500 |
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Share forfeited A/c (1,500×1) |
Dr. |
1,500 |
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To Share Capital A/c (1,500×8) |
|
12,000 |
|
||||
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(Being 1,500 forfeited shares were
reissued @ ₹7 per share for
₹8) |
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|
Share forfeited A/c |
Dr. |
6,000 |
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||||
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To Capital Reserve A/c |
|
6,000 |
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||||
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( Being balance in the forfeited
amount of 1,500 shares transfer to capital reserve account) |
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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 |
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|||||
|
Date |
Particulars |
|
L.F. |
Debit (₹) |
Credit (₹) |
|
|
|
|
Share Capital A/c (3,000×9) |
Dr. |
27,000 |
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To Share forfeited A/c (3,000×6) |
|
18,000 |
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To Share Allotment A/c (3,000×3) |
|
9,000 |
|
||||
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|
(Being 3,000 shares forfeited for
non-payment of First call due on at ₹ 3) |
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Bank A/c (2,000×9) |
Dr. |
18,000 |
|
||||
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To Share Capital A/c (2,000×9) |
|
18,000 |
|
||||
|
(Being 2,000 forfeited shares were
reissued @ ₹9 per share for
₹9) |
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|
|||||
|
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) |
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Amount to be transferred to Capital
Reserves = 18,000×2,000÷3,000= 12,000
12,000- Nil (discount on re-issue)
=12,000