Question

Amit holds 100 shares of Rs. 10 each on which he has paid Rs. 1 per share as application money. Bimal holds 200 shares of Rs. 10 each on which he has paid Rs. 1 and Rs. 2 per share as application and allotment money, respectively. Chetan holds 300 shares of Rs. 10 each and has paid Rs. 1 on application, Rs. 2 on allotment and Rs 3 for the first call. They all fail to pay their appears and the second 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 transactions.

Answer 1

$\begin{array}{ccccccc}& & & & & & \\ & & & & \text{Journal Entries}& & \end{array}\begin{array}{cccccc}\text{Date}& \text{Particulars}& & \text{LF}& \text{Amt. (Dr)}& \text{Amt.(Cr)}\\ \text{(i)}& \text{Share Capital A/c}(600\times 8)& \text{Dr}& & 4,800& \\ & \text{To Share Allotment A/c}(100\times 2)& & & & 200\\ & \text{To Share First Call A/c}(300\times 2)& & & & 900\\ & \text{To Share Second Call A/c}(600\times 2)& & & & 1,200\\ & \text{To Share Forfeiture A/c}(600+1,000+900)& & & & 2,500\\ & \text{(600 shares @ Rs 10 per share Rs 8 called-up}& & & & \\ & \text{forfeited after making second call)}& & & & \\ & \underset{–}{}& & & & \\ \text{(ii)}& \text{Bank A/c}& \text{Dr}& & 6,600& \\ & \text{To Share Capital A/c}& & & & 6,000\\ & \text{To Securities Premium A/c}& & & & 600\\ & \text{(600 shares @ Rs 10 each Rs 11 per share fully}& & & & \\ & \text{paid-up reissued )}& & & & \\ & \underset{–}{}& & & & \\ \text{(iii)}& \text{Share Forfeiture A/c}& \text{Dr}& & 2,500& \\ & \text{To Capital Reserve A/c}& & & & 2,500\\ & \text{(Balance of share forfeiture account transferred}& & & & \\ & \text{to capital reserve account after reissue)}& & & & \\ & \underset{–}{}& & & & \end{array}$

Working Note :

Total Money Called –up :

$\begin{array}{cc}& \\ & \text{Rs.}\\ \text{Application}& 1\\ \text{Allotment}& 2\\ \text{First Call}& 3\\ \text{Second Call}& 2\\ & \overline{8}\end{array}$

Amount Transferred to Share Forfeiture :

$\begin{array}{cc}& \\ \text{Application money received from Amit}(100\text{share}\times 1)& 100\\ \text{Application and allotment money received from}& \\ \text{Bimal}(200\text{share}\times 3)& 600\\ \text{Application, allotment and first call received from Chetan}& \\ (300\text{share}\times 6)& \underset{–}{1800}\\ \text{Amount transferred to share forfeiture}& \underset{–}{2500}\end{array}$

Calculation of Capital Reserve :

As shares are reissued at price higher than face value hence full amount of share forfeiture will be transferred to capital reserve.