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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Record the Journal entries for forfeiture and reissue of shares in the following cases:
(i) Basak Ltd. forfeited 20 shares of ₹10 each, ₹7 called-up, on which the shareholder had paid application and allotment money of ₹5 per share. Out of these, 15 shares were reissued to Naresh as ₹7 per share paid-up, for ₹8 per share.
(ii) Y Ltd. forfeited 90 shares of ₹10 each, ₹8 called-up, issued at a premium of ₹2 per share, to R, for non-payment of allotment money of ₹5 per share (including premium). Out of these, 80 shares were reissued to Sanjay as ₹8 called-up, for ₹10 per share.
JOURNAL
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| (i) | Share Capital A/c (20 × ₹7) Dr. | 140 | ||
| To Share Forfeiture A/c (20 × ₹5) | 100 | |||
| To Calls-in-Arrears A/c (20 × ₹2) | 40 | |||
| (20 shares, ₹7 called-up, forfeited for non-payment of the call) | ||||
| Bank A/c (15 × ₹8) Dr. | 120 | |||
| To Share Capital A/c (15 × ₹7) | 105 | |||
| To Securities Premium Reserve A/c (15 × ₹1) | 15 | |||
| (15 shares reissued to Naresh as ₹7 paid-up, for ₹8 per share) | ||||
| Share Forfeiture A/c (15 × ₹5) Dr. | 75 | |||
| To Capital Reserve A/c | 75 | |||
| (Transfer of profit on reissue of 15 shares) | ||||
| (ii) | Share Capital A/c (90 × ₹8) Dr. | 720 | ||
| Securities Premium Reserve A/c (90 × ₹2) Dr. | 180 | |||
| To Share Forfeiture A/c (90 × ₹5) | 450 | |||
| To Share Allotment A/c (90 × ₹5) | 450 | |||
| (90 shares forfeited for non-payment of allotment) | ||||
| Bank A/c (80 × ₹10) Dr. | 800 | |||
| To Share Capital A/c (80 × ₹8) | 640 | |||
| To Securities Premium Reserve A/c (80 × ₹2) | 160 | |||
| (80 shares reissued to Sanjay as ₹8 called-up, for ₹10 per share) | ||||
| Share Forfeiture A/c (80 × ₹5) Dr. | 400 | |||
| To Capital Reserve A/c | 400 | |||
| (Transfer of profit on reissue of 80 shares) |
Working Notes: (i) Forfeiture credit on 20 shares = ₹100; on the 15 reissued shares = 100 × 15/20 = ₹75, fully transferred to Capital Reserve (no discount on reissue). (ii) Forfeiture credit on 90 shares = ₹450; on the 80 reissued shares = 450 × 80/90 = ₹400, fully transferred to Capital Reserve (no discount on reissue).
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.
This guide covers "T.S. Grewal Class 12 Vol 2 Chapter 1 Q.75 - Share Capital", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 1 - Share Capital.
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