Question

A company issued 20,000 shares of ₹ 100 each payable ₹ 25 per share on application , ₹ 25 per share on allotment and the balance in two calls of ₹ 25 each. The company did not make the final call of ₹ 25 per share. All the money was duly received with the exception of the amount due on the first call on 400 shares held by Mr. Modi. The Board of Directors forfeited these shares and subsequently reissued them @ ₹ 75 per share paid-up for a sum of ₹ 28,000. journalise the above transactions and prepare Share Capital Account .

Answer 1

Issued and applied capital 20,000 shares of Rs 100 each

Payable as:

Application	Rs	25
Allotment	Rs	25
First Call	Rs	25
Called-up	Rs	75	per share
Final Call	Rs	25
	Rs	100	per share

Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	Bank A/c	Dr.		5,00,000
	To Share Application A/c				5,00,000
	(Share application money received for 20,000 shares at Rs 25 each)
	Share Application A/c	Dr.		5,00,000
	To Share Capital A/c				5,00,000
	(Application money transferred to Share Capital Account)
	Share Allotment A/c	Dr.		5,00,000
	To Share Capital A/c				5,00,000
	(Share Allotment due on 20,000 shares at Rs 25 each)
	Bank A/c	Dr.		5,00,000
	To Share Allotment A/c				5,00,000
	(Allotment money received)
	Share First Call A/c	Dr.		5,00,000
	To Share Capital A/c				5,00,000
	(Share First Call due on 20,000 shares of Rs 25 each)
	Bank A/c	Dr.		4,90,000
	Calls-in-Arrears A/c	Dr.		10,000
	To Share First Call A/c				5,00,000
	(Share First Call Rs 25 per share received on 19,600 shares and a holder of 400 shares did not pay it)
	Share Capital A/c	Dr.		30,000
	To Share Forfeiture A/c				20,000
	To Calls-in-Arrears A/c				10,000
	(400 shares of Rs 100 each, Rs 75 called-up, forfeited for the non-payment of Share First Call Rs 25 per share)
	Bank A/c	Dr.		28,000
	Share Forfeiture A/c	Dr.		2,000
	To Share Capital A/c				30,000
	(400 shares of Rs 100 each, Rs 75 paid-up, reissued for the sum of Rs 28,000)
	Share Forfeiture A/c	Dr.		18,000
	To Capital Reserve A/c				18,000
	(Balance in share forfeiture after re-issue, transferred to capital reserve)

Share Capital Account
Dr.					Cr.
Particulars		Amount Rs	Particulars	Amount Rs
Share Forfeiture		20,000	Share Application	5,00,000
Calls-in-Arrears		10,000	Share Allotment	5,00,000
			Share First Call	5,00,000
			Bank	28,000
Balance c/d			Share Forfeiture	2,000
		15,30,000		15,30,000

Working Note-

Share Forfeiture Credit	20,000
Less: Share Forfeiture Debit	2,000
Balance in Share Forfeiture Account after re-issue	18,000

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

= Rs 18,000