Question

X Ltd. is registered with an authorised capital of Rs 20,00,000 divided into share of Rs 10 each. It has issued 80$\%$ of its nominal capital to general public for subscription. The issued was oversubscribed to the extent of 30,000 shares. The amount payable was as follows : Rs 2 on Application, Rs 3 on Allotment and balance in equal instalment on two calls. The shares were allotted to the public on a pro-rata basis to all the applicants. A shareholder holding 4,000 shares failed to pay both call money and his shares were forfeited. All the forfeited shares were re-issued to Mr. Mohan for Rs 8 per share. Pass necessary Journal entries.

OR

Record the forfeiture and re-issue entries in each of the following cases:

(i) A Ltd. forfeited 1,000 shares of Rs 10 each, for non-payment of rs 2 per share. These shares were re-issued at Rs 9 per share as fully paid up.

(ii) D Ltd. issued share of Rs 20 each. All the shareholders have paid the full money except one shareholder holding 500 shares who failed to pay the final call money of Rs 2 per share. His shares were forfeited and 60$\%$ of its shares were re-issued at Rs 18 per share.

(iii) Akki enterprises forfeited 400 shares for non-payment of Rs 3 per share (Rs 20 face value). All the forfeited shares were re-issued at Rs 22 per share.

Answer 1

$\begin{array}{ccccc}\text{Date}& \text{Particulars}& \text{L.F.}& \text{Debit}& \text{Credit}\\ & & & \left(\text{Rs}\right)& \left(\text{Rs}\right)\\ & \text{Bank A/c}\text{Dr.}& & 3,80,000& \\ & \text{To Equity Share Application A/c}& & & 3,80,000\\ & \underset{–}{\left(\text{Being application money received}\right)}& & & \\ & \text{Equity Share Application A/c}\text{Dr.}& & 3,80,000& \\ & \text{To Equity Share Capital A/c}& & & 3,20,000\\ & \text{To Equity Share Allotment A/c}& & & 60,000\\ & \left(\text{Being application money transfer to share capital and}\right)& & & \\ & \underset{–}{\text{balance amount transferred to allotment stage})}& & & \\ & \text{Equity Share Allotment A/c}\text{Dr.}& & 4,80,000& \\ & \text{To Equity Share Capital A/c}& & & 4,80,000\\ & \underset{–}{\left(\text{Being allotment money due}\right)}& & & \\ & \text{Bank A/c}\text{Dr.}& & 4,20,000& \\ & \text{To Equity Share Allotment A/c}& & & 4,20,000\\ & \underset{–}{\left(\text{Being allotment money received}\right)}& & & \\ & \text{Equity Share First Call A/c}\text{Dr.}& & 4,00,000& \\ & \text{To Equity Share Capital A/c}& & & 4,00,000\\ & \underset{–}{\left(\text{Being call money due}\right)}& & & \\ & \text{Bank A/c}\text{Dr.}& & 3,90,000& \\ & \text{Calls-in-Arrears A/c}\text{Dr.}& & 10,000& \\ & \text{To Equity Share First Call A/c}\text{Dr.}& & & 4,00,000\\ & \underset{–}{\left(\text{Being all money received except on 4,000 shares}\right)}& & & \\ & \text{Bank A/c}\text{Dr.}& & 3,90,000& \\ & \text{Calls-in-Arrears A/c}\text{Dr.}& & 10,000& \\ & \text{To Equity Share Second Call A/c}\text{Dr.}& & & 4,00,000\\ & \underset{–}{\left(\text{Being all money received except on 4,000 shares}\right)}& & & \\ & \text{Equity Share Second Call A/c}\text{Dr.}& & 4,00,000& \\ & \text{To Equity Share Capital A/c}\text{Dr.}& & & 4,00,000\\ & \underset{–}{\left(\text{Being call money due}\right)}& & & \\ & \text{Equity Share Capital A/c}\text{Dr.}& & 40,000& \\ & \text{To Calls-in-Arrears A/c}& & & 20,000\\ & \text{To Share Forfeiture A/c}& & & 20,000\\ & \underset{–}{\left(\text{Being shares forfeited for non-payment}\right)}& & & \\ & \text{Bank A/c}\text{Dr.}& & 32,000& \\ & \text{Share Forfeiture A/c}\text{Dr.}& & 8,000& \\ & \text{To Equity Share Capital A/c}& & & 40,000\\ & \underset{–}{\left(\text{Being 60 \% of the forfeited shares re-issued}\right)}& & & \\ & \text{Share Forfeiture A/c}\text{Dr.}& & 12,000& \\ & \text{To Capital Reserve A/c}\text{Dr.}& & & 12,000\\ & (\text{Being forfeited amount on re-issued shares transferred}& & & \\ & \text{to Capital Reserve})& & & \end{array}$

Note: Applications received from public is 1,90,000 shares.

OR

JOURNAL

$\begin{array}{ccccc}\text{Date}& \text{Particulars}& \text{L.F.}& \text{Debit}& \text{Credit}\\ & & & \left(\text{Rs}\right)& \left(\text{Rs}\right)\\ & \text{Equity Share Capital A/c}\text{Dr.}& & 8,000& \\ & \text{To Calls-in-Arrears A/c}& & & 2,000\\ & \text{To Share Forfeiture A/c}& & & 6,000\\ & \underset{–}{\left(\text{Being shares forfeited}\right)}& & & \\ & \text{Bank A/c}\text{Dr.}& & 9,000& \\ & \text{Share Forfeiture A/c}& & 1,000& \\ & \text{To Equity Share Capital A/c}& & & 10,000\\ & \underset{–}{\left(\text{Being forfeited shares re-issued}\right)}& & & \\ & \text{Share Forfeiture A/c}\text{Dr.}& & 5,000& \\ & \text{To Capital Reserve A/c}& & & 5,000\\ & \text{To Equity Share Capital A/c}& & & \\ & (\text{Being share forfeiture amount transferred to Capital}& & & \\ & \underset{–}{\text{Reserve})}& & & \\ & \text{Equity Share Capital A/c}\text{Dr.}& & 10,000& \\ & \text{To Calls-in-Arrears A/c}& & & 1,000\\ & \text{To Share Forfeiture A/c}& & & 9,000\\ & \underset{–}{\left(\text{Being share forfeited}\right)}& & & \\ & \text{Bank A/c}\text{Dr.}& & 5,400& \\ & \text{Share Forfeiture A/c}\text{Dr.}& & & 600\\ & \text{To Equity Share Capital A/c}& & & 9,000\\ & \underset{–}{\left(\text{Being forfeited shares re-issued}\right)}& & & \\ & \text{Share Forfeiture A/c}\text{Dr.}& & 8,400& \\ & \text{To Capital Reserve A/c}& & & 8,400\\ & \underset{–}{\left(\text{Being share forfeiture amount transferred to Capital Reserve}\right)}& & & \\ & \text{Equity Share Capital A/c~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Dr}& & 8,000& \\ & \text{To Calls-in Arrears A/c}& & & 1,200\\ & \text{To Share Forfeiture A/c}& & & 6,800\\ & \underset{–}{\text{(Being shares forfeited)}}& & & \\ & \text{Bank A/c}\text{Dr.}& & 8,800& \\ & \text{To Equity Share Capital A/c}& & & 8,000\\ & \text{To Securities Premium Reserv e A/c}& & & 800\\ & \underset{–}{\left(\text{Being forfeited share re-issued}\right)}& & & \\ & \text{Share Forfeiture A/c}\text{Dr.}& & 6,800& \\ & \text{To Capital Reserve A/c}& & & 6,800\\ & \left(\text{Being share forfeited amount transferred to Capital Reserve}\right)& & & \end{array}$