Question 51 Chapter 8 of +2-A
51. X ltd. Forfeited share 100 shares of Rs 10 each ( called-up) issued at a premium of Rs 2 per share to MR. R , on which he had paid application money of Rs 5 per share , for non payment of allotment money of Rs 5 per share (including premium ) . Out of these , 70 shares were reissued to MR Sanjay as Rs 8 called-up for RS 7 per share .
Give necessary journal entries relating to forfeiture and reissue of shares.
The solution of Question 51 Chapter 8 of +2-A: –
| Date | Particulars |
L.F. | Debit | Credit | |
| Share capital A/c | Dr | 800 | |||
| Share premium A/c | Dr | 200 | |||
| To Share second and final call A/c | 500 | ||||
| To forfeited shares A/c | 500 | ||||
| (Being share forfeited ) | |||||
| Bank A/c | Dr | 490 | |||
| Share forfeiture A/c | Dr | 70 | |||
| To Share capital A/c | 560 | ||||
| (Being forfeited share reissue ) | |||||
| Forfeited share A/c | Dr | 280 | |||
| To capital Reserve A/c | 280 | ||||
| (Being the gain on reissue transferred to capital reserve ) | |||||
| Particulars |
Details | Amount | |
| Calculation of capital reserve | |||
| Share Forfeiture (Cr.) | 350 | ||
| Less: Share Forfeiture Debit | (70) | ||
| Balance in Share Forfeiture A/c | 280 | ||
(Note) Capital Reserve:
= Balance in Share Forfeiture after re-issue per share × Number of Shares reissued
=Rs.4× 70 = Rs.280
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Also, Check out the solved question of previous Chapters: –
T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)
- Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
- Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
- Chapter No. 3 – Goodwill: Nature and Valuation
- Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
- Chapter No. 5 – Admission of a Partner
- Chapter No. 6 – Retirement/Death of a Partner
- Chapter No. 7 – Dissolution of a Partnership Firm
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
- Chapter No. 4 – Accounting Ratios
- Chapter No. 5 – Cash Flow Statement
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