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Question No 40 Chapter 1 - Unimax Class 12 Part 2 - 2021
Pass journal entries for the forfeiture and reissued in the following cases:
1. Kia Ltd. forfeited 600 shares of ₹ 10 each fully called up for non-payment of first call of for ₹ 8 per shares.
2. Riya Ltd. Forfeited 1,000 shares of ₹ 10 each fully paid up, on which the holder has paid only the application money of ₹ 3 per share. Out of these, 600 shares, were reissued at ₹ 11 per shares, fully paid up.
(capital reserve: (1) ₹ 2,400, (2) ₹ 1,800)
| Date | Particulars |
L.F. | Debit | Credit | |
|---|---|---|---|---|---|
| Case (1) | Shares capital A/c | Dr. | 6,000 | ||
| To Shares first call A/c | 1,200 | ||||
| To shares final call A/c | 1,200 | ||||
| To Shares Forfeited A/c | 3,600 | ||||
| (Being 600 shares forfeited for non-payment of first & final call) | |||||
| Bank A/c | Dr. | 4,800 | |||
| Shares forfeited A/c | Dr. | 1,200 | |||
| To Share capital A/c | 6,000 | ||||
| (Being reissued of 600 shares @ 8) | |||||
| Shares forfeited A/c | Dr. | 2,400 | |||
| To Capital reserve A/c | 2,400 | ||||
| (Being transfer of forfeited share account to capital reserve) | |||||
| Case (2) | Shares capital A/c | Dr. | 10,000 | ||
| To Call in arrear A/c | 7,000 | ||||
| To shares forfeited A/c | 3,000 | ||||
| (Being 1,000 shares forfeited for non-payment of allotment & final call) | |||||
| Bank A/c | Dr. | 6,600 | |||
| To Share capital A/c | 6,000 | ||||
| To Securities Premium reserve A/c | 600 | ||||
| (Being reissued of 600 shares @ 11) | |||||
| Shares forfeited A/c | Dr. | 1,800 | |||
| To Capital reserve A/c | 1,800 | ||||
| (Being transfer of forfeited share account to capital reserve) | |||||
Working Note:
1. Calculate of amount transferred to capital reserve A/c
| Amount forfeited on 600 shares | = (250+900+2250) |
| =₹ 3,400 | |
| Less: Discount allowed on reissued shares | = ₹ 600 |
| Balance creditors to capital reserve A/c | = ₹ 2,800 |
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Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
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