The Hindustan Manufacturing Ltd. had a total subscribed capital of ₹ 10,00,000 in Equity Shares of ₹ 10 each of which ₹ 7.50 were called-up. A final call of ₹ 2.50 was made and all amount paid except two calls of ₹ 2.50 each in respect of 100 shares held by D . These shares were forfeited and reissued at ₹ 8 per share .
Pass necessary journal entries (including that of cash) to record the transactions of final call , forfeiture of shares and reissue of forfeited shares . Also, prepare the Balance Sheet of the company.
Pass necessary journal entries (including that of cash) to record the transactions of final call , forfeiture of shares and reissue of forfeited shares . Also, prepare the Balance Sheet of the company.
Books of Hindustan Manufacturing Limited
Journal
Date
Particulars
L.F.
Debit
Amount
Rs
Credit
Amount
Rs
Equity Share Final Call A/c
Dr.
2,50,000
To Equity Share Capital A/c
2,50,000
(Share Final Call due on 1,00,000 shares at Rs 2.5 per share)
Bank A/c
Dr.
2,49,750
Calls-in-Arrears A/c
Dr.
250
To Equity Share Final Call A/c
2,50,000
(Share Final Call of Rs 2.5 per share received from 99,900 shares and 100 shares did not pay it)
Equity Share Capital A/c
Dr.
1,000
To Share Forfeiture A/c
500
To Calls-in-Arrears A/c
500
(100 shares of Rs 10 each forfeited for the non-payment of two calls of Rs 2.5 each)
Bank A/c
Dr.
800
Share Forfeiture A/c
Dr.
200
To Equity Share Capital A/c
1,000
(100 shares of Rs 10 each reissued at Rs 8 per share, fully paid-up)
Share Forfeiture A/c
Dr.
300
To Capital Reserve A/c
300
(Balance in Share Forfeiture Account after re-issue of shares, transferred to Capital Reserve)
As per the Schedule III of Companies Act, 2013, the Company's Balance Sheet is presented as follows.
Hindustan Manufacturing Ltd.
Balance Sheet
Particulars
Note No.
Amount
(Rs)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital
1
10,00,000
b. Reserves and Surplus
2
300
2. Non-Current Liabilities
3. Current Liabilities
Total
10,00,300
II. Assets
1. Non-Current Assets
2. Current Assets
a. Cash and Cash Equivalents
3
10,00,300
Total
10,00,300
NOTES TO ACCOUNTS
Note No.
Particulars
Amount
(Rs)
1
Share Capital
Authorised Share Capital
1,00,000 shares of Rs 10 each
10,00,000
Issued Share Capital
1,00,000 shares of Rs 10 each
10,00,000
Subscribed, Called-up and Paid-up Share Capital
1,00,000 shares of Rs 10 each
10,00,000
2
Reserves and Surplus
Capital Reserve
300
3
Cash and Cash Equivalents
Cash at Bank
10,00,300
Working Notes:
Share Forfeiture Credit (100 shares × Rs 5 each)
500
Less: Share Forfeiture Debit (100 share × Rs 2 each)
200
Loss on re-issue
Balance in Share Forfeiture Account after re-issue
300
Capital Reserve = Balance in Share Forfeiture Account after re-issue = Rs 300
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Books of Hindustan Manufacturing Limited |
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Journal |
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|
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
|
|
|
|
|
|
|
|
Equity Share Final Call A/c |
Dr. |
|
2,50,000 |
|
|
|
To Equity Share Capital A/c |
|
|
2,50,000 |
|
|
|
(Share Final Call due on 1,00,000 shares at Rs 2.5 per share) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
2,49,750 |
|
|
|
Calls-in-Arrears A/c |
Dr. |
|
250 |
|
|
|
To Equity Share Final Call A/c |
|
|
2,50,000 |
|
|
|
(Share Final Call of Rs 2.5 per share received from 99,900 shares and 100 shares did not pay it) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share Capital A/c |
Dr. |
|
1,000 |
|
|
|
To Share Forfeiture A/c |
|
|
500 |
|
|
|
To Calls-in-Arrears A/c |
|
|
500 |
|
|
|
(100 shares of Rs 10 each forfeited for the non-payment of two calls of Rs 2.5 each) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
800 |
|
|
|
Share Forfeiture A/c |
Dr. |
|
200 |
|
|
|
To Equity Share Capital A/c |
|
|
1,000 |
|
|
|
(100 shares of Rs 10 each reissued at Rs 8 per share, fully paid-up) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Forfeiture A/c |
Dr. |
|
300 |
|
|
|
To Capital Reserve A/c |
|
|
300 |
|
|
|
(Balance in Share Forfeiture Account after re-issue of shares, transferred to Capital Reserve) |
|
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|
|
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As per the Schedule III of Companies Act, 2013, the Company's Balance Sheet is presented as follows.
|
Hindustan Manufacturing Ltd. |
||
|
Balance Sheet |
||
|
Particulars |
Note No. |
Amount (Rs) |
|
I. Equity and Liabilities |
|
|
|
1. Shareholders’ Funds |
|
|
|
a. Share Capital |
1 |
10,00,000 |
|
b. Reserves and Surplus |
2 |
300 |
|
2. Non-Current Liabilities |
|
|
|
3. Current Liabilities |
|
|
|
Total |
|
10,00,300 |
|
|
|
|
|
II. Assets |
|
|
|
1. Non-Current Assets |
|
|
|
2. Current Assets |
|
|
|
a. Cash and Cash Equivalents |
3 |
10,00,300 |
|
Total |
|
10,00,300 |
|
|
|
|
NOTES TO ACCOUNTS
|
Note No. |
Particulars |
Amount (Rs) |
|
1 |
Share Capital |
|
|
|
Authorised Share Capital |
|
|
|
1,00,000 shares of Rs 10 each |
10,00,000 |
|
|
Issued Share Capital |
|
|
|
1,00,000 shares of Rs 10 each |
10,00,000 |
|
|
Subscribed, Called-up and Paid-up Share Capital |
|
|
|
1,00,000 shares of Rs 10 each |
10,00,000 |
|
|
||
|
2 |
Reserves and Surplus |
|
|
|
Capital Reserve |
300 |
|
|
|
|
|
3 |
Cash and Cash Equivalents |
|
|
|
Cash at Bank |
10,00,300 |
|
|
|
|
Working Notes:
|
Share Forfeiture Credit (100 shares × Rs 5 each) |
500 |
|
|
Less: Share Forfeiture Debit (100 share × Rs 2 each) |
200 |
Loss on re-issue |
|
Balance in Share Forfeiture Account after re-issue |
300 |
|
Capital Reserve = Balance in Share Forfeiture Account after re-issue = Rs 300
