Question no 46 Chapter 1 - Unimax Class 12 Part 2

Question No 46 Chapter 1 – Unimax Class 12 Part 2 – 2021

Table of Contents

The solution of Question 46 Chapter 1 of +2 Part-2: –

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

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

ABC Ltd. forfeited 150 equity shares of ₹10 each issued at a premium of ₹ 5 per share, for non-payment of allotment money of ₹ 8 per share (including premium of ₹ 5 pr share), the first call of ₹ 2 per share and the final call of ₹ 3 per share. Out of these, 100 equity shares were reissued at ₹ 14 pre share. Given journal entries in the books of the company to record the forfeited and reissued of shares

The solution of Question 46 Chapter 1 of +2 Part-2: –

In the books of M/S ABC Ltd.
Journal entries

Date	Particulars		L.F.	Debit	Credit
	Equity Shares capital A/c	Dr.		1,500
	Securities Premium A/c	Dr.		750
	To Equity Shares Allotment A/c				1,200
	To Equity shares forfeited A/c				300
	To Equity share first call A/c				300
	To Equity share final call A/c				450
	(Being 150 equity shares forfeited due to non-payment. First call and final call money)
	Bank A/c	Dr.		1,400
	To Equity share capital A/c				1,000
	To Securities Premium A/c				400
	(Being 100 forfeited equity shares reissued to each, fully paid up ₹ 14 per share)
	Shares forfeited A/c	Dr.		200
	To Capital reserve A/c				200
	(Being profit on 200 forfeited shares transferred to capital reserve)

Working Note:

1. Calculation of Application money

	₹
Face value of share	10
Less: First and final call money	5/5
Less: Allotment money excluding premium (8-5)	3
Application money received and forfeited per share	2

2. Calculate of Amount Transferred to Capital Reserve

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	₹
Amount forfeited on 150 shares	= ₹300
Amount forfeited on 100 shares	= 300/150 X 100 = ₹200
Less: Discount allowed on reissued shares	= Nil
Balance credited to capital reserve A/c	=₹ 200

3. Since, share premium remains unpaid, securities A/c has been debited at the time of forfeiture of shares.
4. Shares, if originally issued at premium and forfeited need not to be issued at original premium.

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