T.S. Grewal Class 12 Vol 2 Chapter 1 Q.64 - Share Capital

Question 64

Alfa Ltd. forfeited 900 Equity Shares of ₹100 each for non-payment of the allotment money of ₹30 per share and the first call of ₹20 per share. The second and final call of ₹25 per share has not been made. The forfeited shares were reissued for ₹90 per share, ₹75 paid-up. Journalise the above.

Solution

Payment schedule: Application ₹25 (balancing figure) + Allotment ₹30 + First Call ₹20 + Final Call ₹25 (not yet made) = ₹100. Called-up at the time of forfeiture = ₹25 + ₹30 + ₹20 = ₹75 per share.

JOURNAL (Books of Alfa Ltd.)

Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
	Equity Share Capital A/c (900 × ₹75)    Dr.		67,500
	To Share Forfeiture A/c			22,500
	To Calls-in-Arrears A/c			45,000
	(900 shares, ₹75 called-up, forfeited for non-payment of allotment and first call, ₹50 per share)
	Bank A/c (900 × ₹90)    Dr.		81,000
	To Share Capital A/c			67,500
	To Securities Premium A/c			13,500
	(900 shares reissued as ₹75 paid-up for ₹90 each; the ₹15 excess over the paid-up target is a fresh premium)
	Share Forfeiture A/c    Dr.		22,500
	To Capital Reserve A/c			22,500
	(Since the reissue price exceeded the paid-up target, no discount was needed, so the entire forfeited amount transfers to Capital Reserve)

Working Note: Share Forfeiture credited on forfeiture = application money received = 900 × ₹25 = ₹22,500.