Question 37 Chapter 8 of +2-Part-1
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 | ||
| To Share allotment A/c | 39,600 | ||||
| (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 | ||
| To Share first Call A/c | 58,950 | ||||
| (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 | ||
| To Share Second & final Call A/c | 58,800 | ||||
| (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
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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