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Question

Bee Ltd. Company forfeited 100 Equity Shares of the face value of ₹ 10 each, ₹ 6 per share called-up, for non-payment of first call of ₹ 2 per share. The forfeited shares were subsequently reissued as fully paid-up @ ₹ 7 each.
Give necessary entries in the company's Journal.

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Solution

Books of Bee Ltd. Company

Journal

Date

Particulars

L.F.

Debit

Amount

(₹)

Credit

Amount

(₹)

Equity Share Capital A/c

Dr.

600

To Share Forfeiture A/c

400

To Calls-in-Arrears A/c

200

(100 shares of Rs 10 each Rs 6 called up, forfeited for the non-payment of first call Rs 2 per shares)

Bank A/c

Dr.

700

Share Forfeiture A/c

Dr.

300

To Share Capital A/c

1,000

(100 shares of 10 each re-issued at Rs 7 per share, fully paid-up)

Share Forfeiture A/c

Dr.

100

To Capital Reserve A/c

100

(Balance in Share Forfeiture of re-issued shares transferred to Capital Reserve)

Working Note-

Share Forfeiture Credit

400

Share Forfeiture Debit

300

Balance in Share Forfeiture of re-issued shares

100

Capital Reserve = Balance in Share Forfeiture of re-issued shares = ₹ 100


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