Question 33 Chapter 8 of +2-Part-1 – USHA Publication 12 Class Part – 1

Question 33 Chapter 8 of +2-Part-1

33. (Issue for Consideration other than Cash/Issue for Cash/Forfeiture/Reissue)
Reliance industries Ltd. was registered with a nominal capital of Rs. 5,00,000 in the shares of Rs. 10 each. It purchased a property from Shah for Rs. 1,00,000 payable in fully paid shares of company. Remaining 40.000 shares were offered to the public, payable as follows –

Rs. 2 on application : Rs. 2 on allotment: Rs. 3 on first call and Rs. 3 on final call.
All the shares were subscribed and allotted.
Raman, who holds 100 shares failed to pay both the calls and his shares were forfeited.
These were re-issued to Mohit at Rs. 8.50 per share fully paid.
Record the above in the company’s journal and prepare a balance sheet.

The solution of Question 33 Chapter 8 of +2 Part-1: –

Journal
Date	Particulars		L.F.	Debit	Credit
A)	Property A/c	Dr.		1,00,000
	To Shah A/c				1,00,000
	(Being property purchased by shah )
B)	Shah A/c	Dr.		1,00,000
	To Share capital A/c				1,00,000
	(Being issue of 10,000 shares @ Rs. 10 each fully paid in payment of property purchased )
C)	Bank A/c (40,000 X 2)	Dr.		80,000
	To Share Application A/c				80,000
	(Being the receipt of application money on 40,000 shares @ Rs.2 per share )
D)	Share Application A/c (40,000 X 2)	Dr.		80,000
	To Share capital A/c				80,000
	(Being the transfer of application money on 40,000 shares @ Rs. 2 per share )
E)	Share Allotment A/c (40,000 X 2)	Dr.		80,000
	To Share capital A/c				80,000
	(Being allotment money due on allotment of 40,000 shares @ Rs. 3 per share )
F)	Bank A/c (40,000 X 2)	Dr.		80,000
	To Share allotment A/c				80,000
	(Being allotment money received in full settlement)
G)	Share first Call A/c (40,000 X 3)	Dr.		1,20,000
	To Share capital A/c				1,50,000
	(Being amount due on first call of 40,000 share @ Rs. 3 per share)
H)	Bank A/c (39,900 X 3)	Dr.		1,19,700
	To Share first Call A/c				1,19,700
	(Being amount received on first call of 39,900 share @ Rs. 3 per share )
I)	Share first Call A/c (40,000 X 3)	Dr.		1,20,000
	To Share capital A/c				1,50,000
	(Being amount due on final call of 40,000 share @ Rs. 3 per share)
J)	Bank A/c (39,900 X 3)	Dr.		1,19,700
	To Share first Call A/c				1,19,700
	(Being amount received on final call of 39,900 share @ Rs. 3 per share )
k)	Share capital A/c ( 100 X 10)	Dr.		1,000
	To Share Forfeited A/c ( 100 X 3)				400
	To Share first call A/c ( 100 X 3)				300
	To Share final call A/c ( 100 X 3)				300
	(Being forfeitures of 100 shares for non payments of first & Final call money )
L)	Bank A/c (100 X 8.5 )	Dr.		850
	Share Fortified A/c (100X1.5)	Dr.		150
	To Share capital A/c				1,000
M)	Share Fortified A/c (400-150)	Dr.		250
	To Capital Reserve A/c				250
	(Being balance in share fortified transferred to capital reserve)

Working notes : –

Date	Particulars	Note No.	FIG. RELATING TO CURRENT REPORTNG PERIOD	FIG. RELATING TO PREVIOUS REPORTNG PERIOD
(i)	Equity & Liability
	Shareholders fund
	Share Capital	1	5,00,000
	Capital Reserve	2	250
	Non current Liabilities
	Current Liabilities
	Total		5,00,250
(ii)	Assets
	Non -Current Assets
	Tangible Asset		1,00,000
	Current Assets
	Cash & Cash equivalent
	Cash at bank		4,00,250
	Total		5,00,250

Note: –

Date	Particulars	Note No.	FIG. RELATING TO CURRENT REPORTNG PERIOD	FIG. RELATING TO PREVIOUS REPORTNG PERIOD
1	Shared capital
	Authorized capital		5,00,000
	(50,000 shares of Rs. 10 each)
2	Reserve & surplus
	Capital Reserve		250
3	Tangible Asset
	Property		1,00,000
4	Cash & Cash equivalent
	Cash at bank		4,00,250

It all about Question 33 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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