Question

X Ltd . forfeited 100 shares of ₹ 10 each (₹ 8 called-up) issued at a premium of ₹ 2 per share to Mr. R, on which he had paid applications money of ₹ 5 per share , for non-payment of allotment money of ₹ 5 per share (including premium). Out of these, 70 shares were reissued to Mr . Sanjay as ₹ 8 called-up for ₹ 7 per share. Give necessary journal entries relating to forfeiture and reissue of shares.

Answer 1

Books of X Limited Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	Share Capital A/c (100 × 8)	Dr.		800
	Securities Premium A/c (100 × 2)	Dr.		200
	To Share Forfeiture A/c (100 × 5)				500
	To Calls-in-Arrears A/c (100 × 5)				500
	(100 shares of Rs 10 each, Rs 8 called-up with premium Rs 2 per share, forfeited for the non-payment of Rs 5 each including Rs 2 premium)
	Bank A/c	Dr.		490
	Share Forfeiture A/c	Dr.		70
	To Share Capital A/c				560
	(70 shares of Rs 10 each re-issued at Rs 7 per share, Rs 8 paid-up)
	Share Forfeiture A/c	Dr.		280
	To Capital Reserve A/c				280
	(Balance of 70 shares re-issued shares in Share Forfeiture Account transferred to Capital Reserve)

Working Note-

Share Forfeiture Credit	5	per share
Less: Share Forfeiture Debit	1	per share
Balance in Share Forfeiture of re-issued shares	4	per share

Capital Reserve = Balance in Share Forfeiture Account of re-issued shares × No. of shares re-issued

= 70 × 4

= Rs 280