Question

Sukanya Ltd. invited applications for issuing 1,00,000 equity shares of ₹ 10 each. The shares were issued at a premium of ₹ 20 per share. The amount was payable as follows:

On Application and Allotment	$—$	₹ 14 per share (including premium of ₹ 10),
On First Call	$—$	₹ 8 per share (including premium of ₹ 5),
On Final Call	$—$	₹ 8 per share (including premium of ₹ 5).

Applications for 96,000 shares were received. Rohit , a shareholder holding 7,000 shares, failed to pay both the calls and Namit , a holder of 5,000 shares , did not pay the final call.
Shares of Rohit and Namit were forfeited . Of the forfeited shares 8,000 shares including all the shares of Rohit were reissued to Reena at ₹ 8 per share fully paid-up.
Pass necessary journal entries for the above transactions in the books of Sukanya Ltd.

Answer 1

Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
	Bank A/c (96,000×14)	Dr.		13,44,000
	To Equity Share Application and Allotment A/c				13,44,000
	( Application money received)
	Equity Share Application and Allotment A/c	Dr.		13,44,000
	To Equity Share Capital A/c (96,000×4)				3,84,000
	To Security Premium Reserve A/c (96,000×10)				9,60,000
	(Application money adjusted to Share Capital)
	Equity Share First Call A/c (96,000×8)	Dr.		7,68,000
	To Equity Share Capital A/c (96,000×3)				2,88,000
	To Security Premium Reserve A/c (96,000×5)				4,80,000
	(First call money due)
	Bank A/c (7,68,000­­ – 56,000)	Dr.		7,12,000
	To Equity Share First Call A/c				7,12,000
	(First call money received)
	Equity Share Second Call A/c (96,000×8)	Dr.		7,68,000
	To Equity Share Capital A/c (96,000×3)				2,88,000
	To Security Premium Reserve A/c (96,000×5)				4,80,000
	(Second call money due)
	Bank A/c (7,68,000­­ – 56,000 – 40,000)	Dr.		6,72,000
	To Equity Share Second Call A/c				6,72,000
	(Second call money received)
	Equity Share Capital A/c	Dr.		1,20,000
	Security Premium Reserve A/c (7,000×10 + 5,000×5)	Dr.		95,000
	To Equity Share First Call A/c				56,000
	To Equity Share Second Call A/c				96,000
	To Shares Forfeited A/c (7,000×4 + 5,000×7)				63,000
	(Shares Forfeited)
	Bank A/c (8,000×8)	Dr.		64,000
	Shares Forfeited A/c (8,000×2)	Dr.		16,000
	To Equity Share Capital A/c				80,000
	(Shares Reissued)
	Shares Forfeited A/c	Dr.		19,000
	To Capital Reserve A/c				19,000
	(Profit on Reissue transferred to Capital Reserve A/c)

Working Notes:

WN1: Amount transferred to Capital Reserve

Amount forfeited on reissued shares of Rohit = Rs 28,000

Amount forfeited on reissued shares of Namit$=\mathrm{Amount}\mathrm{}\mathrm{Forfeited}\times \frac{\mathrm{Shares}\mathrm{}\mathrm{Re}-\mathrm{issued}\mathrm{}}{\mathrm{Shares}\mathrm{Forfeited}}$

$=35,000\times \frac{1,000}{5,000}=7,000$

Total amount forfeited on reissued shares = 28,000 + 7,000 = Rs 35,000

Amount transferred to Capital Reserve = 35,000 – 16,000 = Rs 19,000