T.S. Grewal Class 12 Vol 2 Chapter 1 Q.74 - Share Capital

Question 74

Rekha holds 100 shares of ₹10 each on which she has paid ₹1 per share on application. Sunita holds 200 shares of ₹10 each on which she has paid ₹1 and ₹2 per share on application and allotment respectively. Teena holds 300 shares of ₹10 each and has paid ₹1 on application, ₹2 on allotment, and ₹3 on first call. They all fail to pay their arrears and the second call of ₹2 per share. Their shares are forfeited and subsequently reissued at ₹11 per share, fully paid-up. Journalise the above.

Solution

Called-up per share = App ₹1 + Allotment ₹2 + First Call ₹3 + Second Call ₹2 = ₹8.

JOURNAL

Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
Forfeiture of Shares
Shares of Rekha
	Share Capital A/c (100 × ₹8)    Dr.		800
	To Share Forfeiture A/c (100 × ₹1)			100
	To Calls-in-Arrears A/c (100 × ₹7)			700
	(100 shares, ₹8 called-up, held by Rekha, forfeited for non-payment of ₹7 per share)
Shares of Sunita
	Share Capital A/c (200 × ₹8)    Dr.		1,600
	To Share Forfeiture A/c (200 × ₹3)			600
	To Calls-in-Arrears A/c (200 × ₹5)			1,000
	(200 shares, ₹8 called-up, held by Sunita, forfeited for non-payment of ₹5 per share)
Shares of Teena
	Share Capital A/c (300 × ₹8)    Dr.		2,400
	To Share Forfeiture A/c (300 × ₹6)			1,800
	To Calls-in-Arrears A/c (300 × ₹2)			600
	(300 shares, ₹8 called-up, held by Teena, forfeited for non-payment of ₹2 per share)
Reissue of Shares
	Bank A/c (600 × ₹11)    Dr.		6,600
	To Share Capital A/c (600 × ₹10)			6,000
	To Securities Premium Reserve A/c (600 × ₹1)			600
	(600 shares of Rekha, Sunita and Teena reissued at ₹11 per share, fully paid-up)
	Share Forfeiture A/c    Dr.		2,500
	To Capital Reserve A/c			2,500
	(Balance of Share Forfeiture Account transferred to Capital Reserve)

Working Note: Share Forfeiture credit: Rekha ₹100 + Sunita ₹600 + Teena ₹1,800 = ₹2,500. Since all forfeited shares were reissued above par (no discount), the full ₹2,500 is transferred to Capital Reserve.