T.S. Grewal Class 12 Vol 2 Chapter 1 Q.67 - Share Capital

Question 67

The Directors of Maharana Ltd. resolved on 1st May, 2023 that 2,000 Equity Shares of ₹10 each, ₹7.50 paid-up, be forfeited for non-payment of the final call of ₹2.50. On 10th June, 2023, 1,800 of these shares were reissued for ₹6 per share. Give the necessary Journal entries.

Solution

JOURNAL (Books of Maharana Ltd.)

Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
2023 May 1	Equity Share Capital A/c (2,000 × ₹10)    Dr.		20,000
	To Share Forfeiture A/c (2,000 × ₹7.50)			15,000
	To Calls-in-Arrears A/c (2,000 × ₹2.50)			5,000
	(2,000 shares forfeited for non-payment of the ₹2.50 final call)
Jun 10	Bank A/c (1,800 × ₹6)    Dr.		10,800
	Share Forfeiture A/c    Dr.		7,200
	To Share Capital A/c (1,800 × ₹10)			18,000
	(1,800 shares reissued at ₹6 per share, fully paid)
	Share Forfeiture A/c    Dr.		6,300
	To Capital Reserve A/c			6,300
	(Balance of Share Forfeiture Account on the 1,800 reissued shares transferred to Capital Reserve)

Working Note: Forfeited amount per share = ₹7.50, less ₹4 discount per share on reissue = ₹3.50 per share retained; for 1,800 shares, Capital Reserve = 1,800 × ₹3.50 = ₹6,300.