A company forfeited $2000$ shares of Rs. $10$ each(which were issued at par) held by Mr. John for non-payment of allotment money of Rs. $4$ per share. The called up value per share was Rs. $9$ . On forfeiture, the amount debited to share capital will be ___________.

Rs.

10, 000

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Rs.

8, 000

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Rs.

2000

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Rs.

18, 000

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Solution

The correct option is D Rs. $18, 000$
The company debits a certain amount to the share capital at the time of forfeiture of shares which is always the called up value. And the called up value is that amount which any company demands from its shareholders periodically every year.
The share capital is debited because the called up amount which the company was expecting from was shareholders has not been deposited and thus they have to reduce the capital balance by debiting share capital account.

Share capital amount can be calculated as under:
$S h a r e C a p i t a l A m o u n t = C a l l e d u p v a l u e p e r s h a r e \times N o . o f s h a r e s$
Substitute values in the above equation
$S h a r e C a p i t a l A m o u n t = R s 9 \times 2000 s h a r e s = R s 18, 000$
The amount debited to share capital is $R s 18, 000$ .

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Q. Journalise the following transaction in the books Bhushan Oil Ltd
(a) 200 shares of Rs. 100 each issued at a premium of Rs. 10 were forfeited for the non-payment of allotment money of Rs. 60 per share. The first and final call of Rs. 20 per share on these shares were not made. The forfeited shares were reissued at Rs. 70 per share as fully paid-up.
(b) 150 shares of Rs. 10 each issued at a premium of Rs. 4 per share payable with allotment were forfeited for non-payment of allotment money of Rs. 8 per share including premium. The first and final call of Rs. 4 per share were not made. The forfeited share were reissued at Rs. 15 per share fully paid-up.
(c) 400 share of Rs. 50 each issued at par were forfeited for non-payment of final call of Rs. 10 per share. These share were reissued at Rs. 45 per share fully paid-up.

Journalise the following transaction in the books Bhushan Oil Ltd:

(a) 200 shares of Rs 100 each issued at a discount of Rs 10 were forfeited for the non payment of allotment money of Rs 50 per share. The first and final call of Rs 20 per share on these share were not made. The forfeited share were reissued at Rs 70 per share as fully paid-up.

(b) 150 shares of Rs 10 each issued at a premium of Rs 4 per share payable with allotment were forfeited for non-payment of allotment money of Rs 8 per share including premium. The first and final call of Rs 4 per share were not made. The forfeited share were reissued at Rs 15 per share fully paid-up.

(c) 400 share of Rs 50 each issued at par were forfeited for non-payment of final call of Rs 10 per share. These share were reissued at Rs 45 per share fully paid-up.

Give Journal entries for forfeiture and re-issue of shares:

(i) A Ltd. forfeited 1,000 shares of Rs 10 each, Rs 7 called up, issued at a premium of 20% (to be paid at the time of allotment) for non-payment of a first call of Rs 2 per share. Out of these, 600 shares were re-issued as Rs 7 paid up for Rs 4 per share.

(ii) B Ltd. forfeited 1,000 shares of Rs 10 each, Rs 7 called up, issued at a premium of 20% (to be paid at the time of allotment) for non-payment of allotment money of Rs 4 per share (including premium) and first call of Rs 2 per share. Out of these, 600 shares were re-issued as fully paid in such a way that Rs 900 were transferred to capital reserve.

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A company forfeited 2000 shares of Rs. 10 each(which were issued at par) held by Mr. John for non-payment of allotment money of Rs. 4 per share. The called up value per share was Rs. 9. On forfeiture, the amount debited to share capital will be ___________.

A company forfeited $2000$ shares of Rs. $10$ each(which were issued at par) held by Mr. John for non-payment of allotment money of Rs. $4$ per share. The called up value per share was Rs. $9$ . On forfeiture, the amount debited to share capital will be ___________.