Question

Star Ltd. forfeited 500 Equity Shares of ₹ 100 each for non-payment of first call of ₹ 30 per share . The final call of ₹ 10 per share was not yet made. Out of these, 60% shares were reissued for ₹ 39,000 fully paid. journalise the forfeiture and reissue of shares.

Answer 1

Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
	Equity Share Capital A/c (500×90)	Dr.		45,000
	To Equity Share 1st Call A/c (500×30)				15,000
	To Share Forfeited A/c (500×60)				30,000
	( 500 equity shares forfeited for non-payment of final call)
	Bank A/c (300×130)	Dr.		39,000
	To Equity Share Capital A/c (300×100)				30,000
	To Security Premium Reserve A/c (300×30)				9,000
	(300 shares are reissued @130 per share)
	Share Forfeited A/c	Dr.		18,000
	To Capital Reserve A/c				18,000
	( Profit on reissue of 300 shares transferred to Capital Reserve)

Working Note:

Amount transferred to Capital Reserve

Shares Re-issued = 300

Shares Forfeited = 500

Amount forfeited in respect of 300 shares = $\mathrm{Amount}\mathrm{}\mathrm{Forfeited}\times \frac{\mathrm{Shares}\mathrm{}\mathrm{Re}-\mathrm{issued}}{\mathrm{Shares}\mathrm{}\mathrm{Forfeited}}$

= $30,000\times \frac{300}{500}=18,000$