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Question

A holds 100 Shares of Rs.10 each on which he has paid Re.1 per share as application money. B holds 200 Shares of Rs. each on which he has paid Re.1 and Rs.2 per share as application and allotment money respectively.
They all fail to pay their arrears and the second and final call of Rs.2 per share and the directors, therefore, forfeited their shares. The shares are reissued subsequently for Rs.11 per share as fully paid. Journalise the transaction.

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Solution

Particulars Amt Amt

1) Share Capital A/c (600 x 8 ) Dr 4800
To share allotment a/c ( 100 x 2 ) 200
To share first call a/c ( 300 x 3) 900
To share second call a/c (600 x 2) 1200
To share forfeiture a/c (600 + 1000 + 900) 2500
( Being 600 share @ Rs. 10 per share Rs. 8 called up
forfeited after making second call)

2) Bank a/c Dr 6600
To sh.capital a/c 6000
To securities a/c 600
( Being 600 share @ Rs. 10 each Rs. 11 per share
fully paid up reissued)
3) share forfeited a/c Dr 2500
To capital reserve a/c 2500
(Being balance of share forfeited account
transferred to capital reserve a/c after reissue)



Working note: -
TOTAL MONEY CALLED-UP RS.
Application 1
Allotment 2
First call 3
Second call 2
Total = 8


Amount transferred to share forfeited
application money received from Amit (100 share x 1)
Application and allotment money received from Bimal (200 share x 3)
application, allotment and first call received from chetan (300 share x 6)
Amount transferred to share forfeited

CALCULATION OF CAPITAL RESERVE
As share are reissued at price higher than face value hence full amount of share forfeited will be transferred to capital reserve.

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