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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Pass the necessary Journal entries for forfeiture and reissue of shares in the following cases:
(i) Neon Ltd. forfeited 2,000 shares of ₹10 each, issued at a premium of ₹2 per share, for non-payment of allotment money of ₹5 per share (including premium). The first and final call of ₹2 per share was not yet made. Out of these, 1,500 shares were reissued at ₹7 per share, ₹8 paid-up.
(ii) Mamta Ltd. forfeited 3,000 shares of ₹10 each on which the first call of ₹3 per share was not received. The second and final call of ₹1 per share was not yet made. Out of these, 2,000 shares were reissued at ₹9 per share, ₹9 paid-up. (CBSE 2024)
Case (i): Application ₹5, Allotment ₹5 (₹3 + ₹2 premium), First and Final Call ₹2.
JOURNAL (Books of Neon Ltd.)
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Share Capital A/c (2,000 × ₹8) Dr. | 16,000 | |||
| Securities Premium Reserve A/c (2,000 × ₹2) Dr. | 4,000 | |||
| To Share Forfeiture A/c (2,000 × ₹5) | 10,000 | |||
| To Share Allotment A/c (2,000 × ₹5) | 10,000 | |||
| (2,000 shares forfeited for non-payment of allotment money of ₹5 each, including premium) | ||||
| Bank A/c (1,500 × ₹7) Dr. | 10,500 | |||
| Share Forfeiture A/c (1,500 × ₹1) Dr. | 1,500 | |||
| To Share Capital A/c (1,500 × ₹8) | 12,000 | |||
| (1,500 forfeited shares reissued at ₹7 per share, ₹8 paid-up) | ||||
| Share Forfeiture A/c Dr. | 6,000 | |||
| To Capital Reserve A/c | 6,000 | |||
| (Balance in Share Forfeiture of the 1,500 reissued shares transferred to Capital Reserve) |
Amount transferred to Capital Reserve = (10,000 × 1,500 ÷ 2,000) − 1,500 (discount on reissue) = 7,500 − 1,500 = ₹6,000.
Case (ii): Application and Allotment ₹6, First Call ₹3, Second and Final Call ₹1.
JOURNAL (Books of Mamta Ltd.)
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Share Capital A/c (3,000 × ₹9) Dr. | 27,000 | |||
| To Share Forfeiture A/c (3,000 × ₹6) | 18,000 | |||
| To Share First Call A/c (3,000 × ₹3) | 9,000 | |||
| (3,000 shares forfeited for non-payment of the ₹3 first call) | ||||
| Bank A/c (2,000 × ₹9) Dr. | 18,000 | |||
| To Share Capital A/c (2,000 × ₹9) | 18,000 | |||
| (2,000 forfeited shares reissued at ₹9 per share, ₹9 paid-up) | ||||
| Share Forfeiture A/c Dr. | 12,000 | |||
| To Capital Reserve A/c | 12,000 | |||
| (Balance in Share Forfeiture of the 2,000 reissued shares transferred to Capital Reserve) |
Amount transferred to Capital Reserve = (18,000 × 2,000 ÷ 3,000) − Nil (discount on reissue) = ₹12,000.
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.92 - Share Capital", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 1 - Share Capital.
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