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.

Answer 1

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.