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Question 37 Chapter 8 of +2-Part-1
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37. (Forfeiture/Reissue at Discount) C. Ltd. invited applications for 20,000 Equity shares Rs. 10 each payable as under: On application Rs. 2 per share, on Allotment Rs. 2 per share, on First call Rs. 3 per share, on Final call Rs. 3 per share.
The entire issue was subscribed for and paid with the following exceptions;
(i) P, who was allotted 200 shares, failed to pay the money due on allotment and calls.
(ii) Q, who held 150 shares, did not pay the first call and second call.
(iii) R’ who held 50 shares, did not pay the amount on second call,
The Board of Directors passed a resolution forfeiting all the shares of P, Q and R. These shares were subsequently re-issued as fully paid at a discount of 20%.
Give Journal entries to record transactions in books of C Ltd.
The solution of Question 37 Chapter 8 of +2 Part-1: –
| Journal | |||||
| Date | Particulars | L.F. | Debit | Credit | |
| A) | Bank A/c (20,000 X 2) | Dr. | 40,000 | ||
| To Share Application A/c | 40,000 | ||||
| (Being the receipt of application money on 20,000 shares @ Rs.2 per share ) | |||||
| B) | Share Application A/c | Dr. | 40,000 | ||
| To Share capital A/c | 40,000 | ||||
| (Being the transfer of application money) | |||||
| c) | Share Allotment A/c (20,000 X 2) | Dr. | 40,000 | ||
| To Share capital A/c | 40,000 | ||||
| (Being allotment money due on allotment of 20,000 shares @ Rs. 2 per share ) | |||||
| D) | Bank A/c (19,800 X 2) | Dr. | 39,600 | ||
| Calls in arrear A/c | Dr. | 400 | |||
| To Share allotment A/c | 40,000 | ||||
| (Being allotment money received on 19,860 shares) | |||||
| E) | Share first Call A/c (20,000 X 3) | Dr. | 60,000 | ||
| To Share capital A/c | 60,000 | ||||
| (Being amount due on first call of 20,000 share @ Rs. 3 per share) | |||||
| F) | Bank A/c (19,650 X 3) | Dr. | 58,950 | ||
| Calls in arrear A/c | Dr. | 1,050 | |||
| To Share first Call A/c | 60,000 | ||||
| (Being amount received on first call of 19,650 share @ Rs. 3 per share ) | |||||
| G) | Share Second & final Call A/c (20,000 X 3) | Dr. | 60,000 | ||
| To Share capital A/c | 60,000 | ||||
| (Being amount due on final call of 20,000 share @ Rs. 3 per share) | |||||
| H) | Bank A/c (19,600 X 3) | Dr. | 58,800 | ||
| Calls in arrear A/c | Dr. | 1,200 | |||
| To Share Second & final Call A/c | 60,000 | ||||
| (Being amount received on final call of 19,600 share @ Rs. 3 per share ) | |||||
| I) | Share capital A/c ( 400 X 10) | Dr. | 4,000 | ||
| To Share Allotment A/c | 400 | ||||
| To Share first call A/c ( 200 X 3+ 150X 3) | 1,050 | ||||
| To Share Second final call A/c ( 200 X 3 +150 X 3 +50 X 3) | 1,200 | ||||
| To Share Forfeited A/c ( 200 X 2+ 150 X (2+2) +50 X (2+2+3)) | 1,350 | ||||
| (Being 400 shares fortified as per board reso. No.) | |||||
| J) | Bank A/c (400 X 8 ) | Dr. | 3,200 | ||
| Share Fortified A/c (400X2) | Dr. | 800 | |||
| To Share capital A/c | 4,000 | ||||
| (Being 400 shares reissued @ 20 % discount ) | |||||
| K) | Share Fortified A/c (1,350-800) | Dr. | 550 | ||
| To Capital Reserve A/c | 550 | ||||
| (Being balance in share fortified transferred to capital reserve) | |||||
It all about Question 37 Chapter 8 of +2-Part-1, If you have any problem please comment below.
Forfeiture of shares – Its accounting Entries
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The solution to all questions of Chapter No. 8 – Company Accounts (Share Capital) Class 12 Usha Publication – 2024 is shown as follows, click on the image of the question to get the solution.
Question 16 Chapter 8 of +2 Part-1 – USHA Publication 12 Class Part – 1
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Question 29 Chapter 8 of +2-Part-1 – USHA Publication 12 Class Part – 1
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Question 48 Chapter 8 of +2-Part-1 – USHA Publication 12 Class Part – 1
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Chapter-Wise Solution of Usha Publication Accountancy – Part 2 Class 12 – Session 2024-25 as per the PSEB curriculum
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Chapter No. 8 – Company Accounts (Share Capital)
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Chapter No. 9 – Company Accounts (Issue of Debentures)
Chapter No. 10 – Company Accounts (Redemption of Debentures)
Chapter No. 11 – Financial Statements of a Company
Chapter No. 12 – Financial Statement Analysis
Chapter No. 13 – Tools of Financial Statement Analysis- Comparative and Common Size
Chapter No. 14 – Accounting Ratios
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Chapter No. 15 – Cash Flow Statement
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- Chapter No. 1 – Company Accounts (Share Capital)
- Chapter No. 2 – Issue of Debentures
- Chapter No. 3 – Redemption of Debentures
- Chapter No. 4 – Financial Statements of a Company (Balance Sheet Only)
- Chapter No. 5 -Financial Statement Analysis
- Chapter No. 6 – Tools/Methods of Financial Analysis
- Chapter No. 7 – Ratio Analysis
- Chapter No. 8 – Cash Flow Statement
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