Question 32 Chapter 8 of +2-Part-1 – USHA Publication 12 Class Part – 1

Question 32 Chapter 8 of +2-Part-1

32. (Oversubscription/Prorata Allotment/Forfeiture/Reissue) KK Ltd., issued 6,000 shares of Rs. 100 each at par. Applications for 8,000 shares were received. Amount is payable RS. 30 on application ; Rs. 45 on allotment and Rs. 25 on final call. Excess money received on application was retained for allotment. Hari holding 500 shares did not pay final call, therefore, his shares were forfeited. These shares were reissued to Garry at 85 fully paid up.
Pass forfeiture entry

The solution of Question 32 Chapter 8 of +2 Part-1: –

Journal
Date	Particulars		L.F.	Debit	Credit
A)	Bank A/c (8,000 X 30)	Dr.		2,40,000
	To Share Application A/c				2,40,000
	(Being application money received)
B)	Share Application A/c	Dr.		2,40,000
	To Share capital A/c				1,80,000
	To Share Allotment A/c				60,000
	(Being application money transferred to Share cap. A/c)
C)	Share Allotment A/c	Dr.		2,70,000
	To Share capital A/c				2,70,000
	(Being allotment money due )
D)	Bank A/c (2,70,000-60,000)	Dr.		2,10,000
	To Share allotment A/c				2,10,000
	(Being allotment money received in full)
E)	Share final Call A/c	Dr.		1,50,000
	To Share capital A/c				1,50,000
	(Being first call money due)
F)	Bank A/c (5,500 X 25)	Dr.		1,37,500
	Call in arrears A/c (500 X 25)	Dr.		12,500
	To Share final Call A/c				1,50,000
	(Being final call money received on 5,500 share & arrears On 500 shares)
G)	Share capital A/c	Dr.		50,000
	To Share Forfeited A/c				12,500
	To Call in arrears A/c				37,500
	(Being forfeitures of 500 shares )
H)	Bank A/c (500 X 85 )	Dr.		42,500
	Share Fortified A/c (500X15)	Dr.		7,500
	To Share capital A/c				50,000
	(Being 500 shares reissued @ Rs. 85 )
I)	Share Fortified A/c (500X15)	Dr.		30,000
	To Capital Reserve A/c				30,000
	(Being balance in share fortified transferred to capital reserve)

It all about Question 32 Chapter 8 of +2-Part-1, If you have any problem please comment below.

Forfeiture of shares – Its accounting Entries

You can also Check out the solved question of other Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

• Chapter No. 1 – Accounting Not for Profit Organisations
• Chapter No. 2 – Partnership Accounts – I (Introduction)
• Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
• Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
• Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
• Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
• Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
• Chapter No. 8 – Company Accounts (Share Capital)
• Chapter No. 9 – Company Accounts (Issue of Debentures)
• Chapter No. 10 – Company Accounts (Redemption of Debentures)

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

• Chapter No. 1 – Financial Statements of a Company
• Chapter No. 2 – Financial Statement Analysis
• Chapter No. 3 –  Tools of Financial Statement Analysis- Comparative and Common Size
• Chapter No. 4 – Ratio Analysis
• Chapter No. 5 – Cash Flow Statement

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