Question

Arushi Computers Ltd issued 10,000 equity shares of Rs 100 each at 10% discount. The net amount payable as follows:

On application	Rs 20
On allotment	Rs 30 (Rs 40 – discount Rs 10 )
On first call	Rs 30
On final call	Rs 10

A shareholder holding 200 shares did not pay final call. His shares were forfeited. Out of these 150 shares were reissued to Ms. Sonia at Rs 75 per shares.

Give Journal entries in the books of the company.

Answer 1

Books of Arushi Computers Ltd.
Date	Particulars			L.F.	Debit Amount Rs	Credit Amount Rs
	Bank A/c		Dr.		2,00,000
		To Share Application A/c				2,00,000
	(Share Application money received for 10,000 shares @ Rs 20 per share)
	Share Application A/c		Dr.		2,00,000
		To Share Capital A/c				2,00,000
	(Share Application money for 10,000 shares transferred to Share Capital Account)
	Share Allotment A/c		Dr.		3,00,000
	Discount on Issue of Shares A/c		Dr.		1,00,000
		To Share Capital A/c				4,00,000
	(Allotment money due on 10,000 shares @ Rs 30 per share excluding discount Rs 10)
	Bank A/c		Dr.		3,00,000
		To Share Allotment A/c				3,00,000
	(Share Allotment money received for 10,000 shares @ Rs 30 per share)
	Share First Call A/c		Dr.		3,00,000
		To Share Capital A/c				3,00,000
	(Share First Call money due on 10,000 shares @ Rs 30 per share)
	Bank A/c		Dr.		3,00,000
		To Share First Call A/c				3,00,000
	(First Call money received for 10,000 shares @ Rs 30 per share)
	Share Final Call A/c		Dr.		1,00,000
		To Share Capital A/c				1,00,000
	(Final Call money due on 10,000 shares @ Rs 10 per share)
	Bank A/c		Dr.		98,000
		To Share final call A/c				98,000
	(Final Call money received for 9800 shares @ Rs 10 per share and 200 shares failed to pay)
	Share Capital A/c (200×100)		Dr.		20,000
		To Share Final Call A/c (200×10)				2,000
		To Discount on Issue of Shares A/c (200×10)				2,000
		To Share Forfeiture A/c (200×80)				16,000
	(200 shares forfeited for non-payment of Final Call Rs 10 per share)
	Bank A/c (150×75)		Dr.		11,250
	Discount on Issue of Shares (150×10)		Dr.		1,500
	Share Forfeiture A/c (150×15)		Dr.		2,250
		To Share Capital A/c (150×100)	Dr.			15,000
	(150 forfeited shares reissued at Rs 100 per share for Rs 75)
	Share Forfeiture A/c		Dr.		9,750
		To Capital Reserve A/c				9,750
	(Balance of 150 reissue shares after adjustment transferred to Capital Reserve Account)

Working Notes:

Amount Transferred to Capital Reserve A/c

Amount credited to Share Forfeiture	Rs 80 per share
Less: Amount debited to Share Forfeiture	Rs 15 per share
Balance after adjustment	Rs 65 per share

Amount transferred to Capital Reserve Account = Balance per share after adjustment × Number of shares reissued

Rs 9,750 = Rs 65 × Rs 150 per share