Give the Meaning of Forfeiture of Shares - Accountancy

Applications for 1,27,500 shares were received. Applications for 27,500 shares were rejected and shares were allotted on pro-rata basis to the remaining applicants. Excess money received on application and allotment was adjusted towards sums due to first and final call. The calls were made. A shareholder, who applied for 1,000 shares, failed to pay the first and final call money. His shares were forfeited. All the forfeited shares were reissued at Rs.150 per share fully paid up.

Pass necessary journal entries for the above transactions in the books of AB Ltd.

Sun Pharma Ltd. is registered with an authorized capital of 1,00,00,000 divided into 1,00,000 equity shares of Rs 100 each. The company issued 50,000 shares at a premium of Rs 40 per shares. A shareholder holding 500 shares did not pay the final call of Rs 20 per share. His shares were forfeited. Present the 'Share Capital' in the Balance Sheet of the Company as per Schedule VI Part I of the Companies Act, 1956. Also, prepare notes to accounts.

'Wellness Ltd.' invited applications for issuing 40,000 equity shares of Rs 10 each at a discount of 10%.

The amount was payable as follows :
On application and allotment - Rs 4 per share
On the first call - Rs 3 per share
On second and final call - the balance

Applications for 39,000 shares were received and the allotment was made to all the applicants.
The payment was received as per the following details:
On 30,000 shares - Full amount
On 6,000 shares - Rs 7 per share
On 3,000 shares - Rs 4 per share

The Directors forfeited those shares on which less than Rs 7 per share were received. The forfeited shares were re-issued at `8 per share as fully paid up.
Pass necessary Journal Entries in the books of the company for the above transactions.

'BMY Ltd.' invited applications for issuing 1,00,000 equity shares of Rs 10 each at a premium of `10 per share. The amount was payable as follows :

On application - Rs 10 per share (including Rs 5 premium)
On allotment - The balance

The issue was fully subscribed. A shareholder holding 300 shares paid the full share money with
an application. Another shareholder holding 200 shares failed to pay the allotment money. His shares were forfeited. Later on, these shares were re-issued for Rs 4,000 as fully paid up.
Pass necessary journal entries for the above transaction in the books of BMY Ltd.

'Software Ltd.' invited applications of issuing 70,000 equity share of Rs 10 each on which Rs 7 per share were called up, which were payable as follows:

On application - Rs 2 per share
On allotment - Rs 3 per share
On first call - The balance

The amount was received as follows:
On 40,000 shares - Rs 7 per share
On 20,000 shares - Rs 5 per share
On 10,000 share - Rs 2 per share

The directors forfeited 30,000 shares on which less than Rs 7 per share were received. Later on, the forfeited share was re-issued at Rs 5 per share, as Rs 7 per share paid up

Pass necessary journal entries for the above transactions in the books of the company.

'Nigam Limited' invited applications for issuing 15,000 equity shares of Rs 10 each at a discount of Rs 1 per share. The amount was payable as follows:
On application - Rs 2 per share
On allotment - Rs 3 per share
On first and final call - Rs 4 per share
Applications for 18,000 shares were received. Shares were issued proportionately to all applicants. Excess money received with applications was adjusted towards sums due on allotment. Ramesh who had applied for 360 shares failed to pay allotment and first and final call money. Naresh to whom 150 shares were allotted failed to pay the first and final call money. Shares of both Ramesh and Naresh were forfeited. Out of the forfeited shares, 200 shares were re-issued at `9 per share as fully paid up. The re-issued shares included all the shares of Naresh. Pass necessary journal entries for the above transactions in the books of 'Nigam Limited'.

Ratan Limited invited applications for issuing 12,000 equity shares of Rs 100 each at a premium of Rs 75 per share. The amount was payable as follows :

On application and allotment — Rs 100 per share (including Rs 50 premium)
On first and final call — The balance
Applications for 15,000 shares were received. Shares were allotted on pro-rata basis to all applicants. Excess money received with applications was adjusted towards sums due on first and final call. Govind who had applied for 300 shares paid the full share money at the time of applying for shares. Girdhar, who had applied for 600 shares, failed to pay the first and final call money. His shares were forfeited. Out of the forfeited shares, 300 shares were re-issued at Rs 90 per share as fully paid-up.
Pass necessary journal entries for the above transactions in the books of 'Ratan Limited'.

JY Ltd. invited applications for issuing 70,000 equity shares of Rs 10 each at a discount of 10%. The amount was payable as follows:
On applications and allotment - Rs 4 per share
On first and final call - the balance amount
Application for 2,00,000 shares were received. Applications for 60,000 shares were rejected and money refunded. Shares were allotted on pro-rata basis to the remaining applicants. The first and final call was made. All money was received except on 1,400 shares applied by Naresh. His shares were forfeited. The forfeited shares were re-issued at the maximum discount permissible under the law.

Pass necessary journal entries for the above transactions in the books of JY Ltd.

On 1st April 2012, Micro-tech Ltd. was formed with an authorised capital of Rs 50,00,000 divided into 5,00,000 equity shares of Rs 10 each. The company issued a prospectus inviting applications for 4,50,000 equity shares. The company received applications for 4,20,000 equity shares.
During the first year, Rs 8 per share were called. Ram holding 1,000 shares and Rajesh holding 2,000 shares did not pay the first call of Rs 2 per share. Rajesh's shares were forfeited after the first call and later on 1,500 of the forfeited share were re-issued at Rs 6 per share, Rs 8 called up. Show the following:

a. Share Capital in the Balance Sheet of the company as per revised Schedule VI Part I of the Companies Act, 1956.
b. Also, prepare 'Notes to Accounts' for the same

Answer in one Sentence only :
Give the full form of SEBI.

Give one word / Term / phrase for the following statement :
The account to which excess amount on share forfeited a/c is transferred.

(Forfeiture of shares issued at par)
Vijay Ltd. issued Rs 40,000 Equity shares of Rs 10 each payable as follows.

On Application :	Rs 2	On Allotment :	Rs 3
On First Call :	Rs 3	On Second Call :	Rs.2

The company received applications for Rs 50,000 equity shares. Allotment for shares was made on pro rata basis. Share allotment and calls were made and as also received except Raja holding Rs 1,000 shares failed to pay both the calls. His shares were forfeited after second call.
Record the above transactions in books of Vijay Ltd.
Note: Excess money received on share application 10,000 × Rs 2 = 20,000 will be diverted to share allotment A/c.

State, whether the following statements is True or False.
Forfeited shares are reissued at par only.

X Ltd . forfeited 100 shares of ₹ 10 each (₹ 8 called-up) issued at a premium of ₹ 2 per share to Mr. R, on which he had paid applications money of ₹ 5 per share , for non-payment of allotment money of ₹ 5 per share (including premium). Out of these, 70 shares were reissued to Mr . Sanjay as ₹ 8 called-up for ₹ 7 per share. Give necessary journal entries relating to forfeiture and reissue of shares.

Software Ltd. company with registered capital of ₹ 5,00,000 in shares of ₹ 10 each issued 20,000 of such shares payable ₹ 2 on application, ₹ 4 on allotment, ₹ 2 on first call ₹ 2 on final call. All the money payable on allotment was duly received but on the first call being made, one shareholder paid the entire balance on his holding of 300 shares and five shareholders with a total holding of 1,000 shares failed to pay their dues on the first call. These shares were forfeited for non-payment of first call money. Final call was made and all the money due was received. Later on, forfeited shares were reissued @ ₹ 6 per share as fully paid-up.
Record the above in the company's Journal and prepare the Balance Sheet.

Pass journal entries in the following cases:
M Ltd forfeited 200 Equity Shares of ₹10 each , issued at a premium of ₹ 5 per share , held by Ram for non-payment of the final call of ₹ 3 per share . Of these , 100 shares were reissued to Vishu at a discount of ₹ 4 per share .

JCV Ltd., forfeited 200 shares of ₹ 10 each issued at a premium of ₹ 2 per share for the non-payment of allotment money of ₹ 3 per share (including premium). The first and final call of ₹ 4 per share has not been made as yet . 50% of the forfeited shares were reissued at ₹ 8 per share as fully paid-up . Pass necessary Journal entries for the forfeiture and reissue of shares.

150 shares of ₹ 10 each issued at a premium of ₹ 4 per share payable with allotment were forfeited for non-payment of allotment money of ₹ 8 per share including premium. The first and final call of ₹ 4 per Pass Journal entries in the books of X Ltd. for the above.

'Telecom Ltd.' issued 20,000 Equity Shares of ₹ 10 each at a premium of ₹ 5 per share, payable as: ₹ 7 (including premium) on application, ₹ 5 on allotment and the balance after three months of allotment. A shareholder to whom 200 shares were allotted failed to pay the allotment and call money and his shares were forfeited. 160 of the forfeited shares were reissued for ₹ 1,600.
Give necessary entries in company's Journal and the Balance Sheet.

Krishna & Co. Ltd. with an authorised capital of ₹ 2,00,000 divided into 20,000 Equity Shares of ₹ 10 each, issued the entire amount of the shares payable as:
₹ 5 on application (including premium ₹ 2 per share),
₹ 4 on allotment, and
₹ 3 on call.
All share money is received in full with the exception of the allotment money on 200 shares and the call money on 500 shares (including the 200 shares on which the allotment money has not been paid).
The above 500 shares are duly forfeited and 400 of these( including the 200 shares on which allotment money has not been paid) are reissued at ₹ 7 per share payable by the purchaser as fully paid-up. Pass journal entries(including cash transactions) and show the balances in the Balance Sheet giving effect to the above transactions.

XYZ Ltd . issued a prospectus inviting applications for 2,000 shares of ₹ 10 each at a premium of ₹ 4 per share , payable as:

On application	---	₹ 6 (including ₹ 1 premium)
On allotment	---	₹ 2 (including ₹ 1 premium)
On first call	---	₹ 3 (including ₹ 1 premium)
On second and final call	---	₹ 3 (including ₹ 1 premium)

Applications were received for 3,000 shares and pro rata allotment was made on the applications for 2,400 shares. It was decided to utilise excess application money towards the amount due on allotment .
X, to whom 40 shares were allotted, failed to pay the allotment money and on his subsequent failure to pay the first call , his shares were forfeited.
Y, who applied for 72 shares failed to pay the two calls and on his such failure , his shares were forfeited.
Of the shares forfeited , 80 shares were sold to Z credited as fully paid-up for ₹ 9 per share , the whole of Y's shares being included . Prepare Journal , Cash Book and the Balance Sheet .

Choose the appropriate alternative from the given options:

Vanya Ltd. forfeited 20,000 equity shares of ₹ 100 each for non-payment of first and final call of ₹ 40 per share. The maximum amount of discount at which these shares can be re-issued will be:

Concept Stationary Ltd. invited applications for issuing 3,00,000 shares of ₹ 10 each at a premium of ₹ 3 per share. The amounts were payable as follows:
On application and allotment – ₹ 7 per share.
On first & final call – balance (including a premium of ₹ 3)
Applications were received for 4,00,000 shares & allotment was made as follows:
(i) To applicants for 80,000 shares – 80,000 shares.
(ii) To applicants for 40,000 shares – nil
(iii) The balance of the applicants were allotted shares on a pro-rata basis.

Excess money received with applications was adjusted towards sums due on the first and final call.
Amit, who belonged to category (i) and was allotted 4,000 shares and Veni, who belonged to category (iii) and was allotted 4,400 shares failed to pay the first and final call money. Their shares were forfeited. The forfeited shares were re-issued at ₹ 7 per share fully paid-up.

Pass necessary journal entries for the above transactions in the books of the company.

Capital reserves are created from ______.

Balance of Forfeited Shares Account after reissue of forfeited shares is transferred to ______.

If 400 shares of ₹ 100 issued at a premium of ₹ 30 on which the full amount has been called and ₹ 80 (including premium) have been received are forfeited, the share forfeiture account should be credited with ______.

Based on the below information, you are required to answer the following question:

Nidiya Limited was incorporated on 1^st April 2017 with a registered office in Mumbai. The capital clause of the memorandum of Association reflected a registered capital of 8,00,000 equity shares of ₹ 10 each and 1,00,000 preference shares of ₹ 50 each.

Since some large investments were required for building and machinery the company in consultation with vendors, M/s VPS Enterprises, issued 1,00,000 equity shares and 20,000 preference shares at par with them in full consideration of assets acquired. Besides this, the company issued 2,00,000 equity shares for cash at par payable as ₹ 3 on application, 2 on the allotment, 3 on the first call and 2 on the second call.

Till date, the second call has not yet been made and all the shareholders have paid except Mr. Ajay who did not pay allotment and calls on his 300 shares and Mr. Vipul who did not pay the first call on his 200 shares. Shares of Mr. Ajay were then forfeited and out of the 100 shares were reissued at ₹ 12 per share.

What amount of share forfeiture would be reflected in the balance sheet?

Pass entries for forfeiture and re-issue in the following case.

Vikram Ltd. forfeited 5,000 shares of Rahul, who had applied for 6,000 shares for non-payment of allotment money of ₹ 5 per share and first and final call of ₹ 2 per share. Only application money of ₹ 3 was paid by him. Out of these 3,000 shares were re-issued @ ₹ 12 per share as fully paid.

Radhe Ltd. forfeited 500 shares of ₹ 10 each fully called up for non-payment of final call of ₹ 3 per share. 300 of these shares were reissued at ₹ 8 per share as fully paid-up. The amount credited to Capital Reserve Account was:

An equity share of ₹10 fully called up on which ₹ 6 has been paid was forfeited for the non-payment of the balance amount. At which of the following minimum price can it be reissued?

Pass necessary journal entries for forfeiture and reissue of forfeited shares in the following cases:

Vipin Ltd. forfeited 10,000 shares of ₹ 10 each issued at a premium of ₹ 1 per share, for non- payment of second and final call of ₹ 2 per share. Out of these, 60% of the shares were reissued ₹ 7 per share fully paid-up.

Lilly Ltd. forfeited 100 shares of ₹ 10 each issued at 10% premium (₹ 8 called up ) on which a shareholder did not pay ₹ 3 of allotment (including premium) and first call of ₹ 2. Out of these 60 shares were reissued to Ram as fully paid for ₹ 8 per share and 20 shares to Suraj as fully paid up @ ₹ 12 per share at different intervals of time.

Prepare Share Forfeiture account.

NH Ltd, with an authorized capital of ₹ 10,00,000 divided into 1,00,000 Equity shares of ₹10 each, issued 50,000 shares to the public at a premium of ₹ 2 per share, payable as follows:

₹ 5 on Application (including premium)

₹ 3 on Allotment

₹ 4 on First and Final Call.

The subscription was at par and the share money was received in full with the exception of the allotment money on 4,000 shares held by shareholder Ravi and the call money on 6,000 shares (including Ravi's shares).

The above 6,000 shares were forfeited by the company and 5,000 of these (including the shares which had been allotted to Ravi) were reissued at ₹ 8 per share as fully paid-up.

You are required to pass journal entries to record the above transactions in the books of the company.

Roxy Ltd. issued Equity shares of 10 each payable as:

₹ 4 on Application and Allotment; ₹ 2 on First Call; ₹ 4 on Second and Final Call.
Following is an extract of the Journal of Roxy Ltd.

Journal of Roxy Ltd. (an extract)
Date	Particulars	L. F.	Dr. (₹)	Cr. (₹)
1.	Share First Call A/c ...Dr.		28,000
	To Share Capital A/c			28,000
	(Being first call due on ___??___ shares @ ₹ 2 each)
2.	Bank A/c ...Dr.		??
	Calls in arrears A/c ...Dr.		2,000
	To Share First Call A/c			28,000
	(Being first call received on ___??___ shares)
3.	Share Capital A/c ...Dr.		??
	To Shares Forfeited A/c			4,000
	To Calls in Arrears A/c			??
	(Being ___??___ shares of ₹ 10 each forfeited for non-payment of first call)
4.	Share Second & Final Call A/c ...Dr.		52,000
	To Share capital A/c			52,000
	(Being second & final call due on ___??___ shares @ ₹ 4 each)
5.	Bank A/c ...Dr.		??
	Calls in Arrears A/c ...Dr.		10,000
	To Share Second & Final Call A/c			52,000
	(Being second call received on ___??___ shares)
6.	Share capital A/c ...Dr.		??
	To Shares Forfeited A/c			??
	To Calls in Arrears A/c			10,000
	(Being ___??___ shares of ₹ 10 each forfeited for non payment of final call)
7.	Bank A/c ...Dr.		??
	Share Forfeited A/c ...Dr.		??
	To Share Capital A/c			??
	(Being 1,500 forfeited shares including those on which the first call was not received reissued @ ₹ 6 per shares fully called)
8.	Share Forfeiture A/c (1,000 × 0) + (500 × 2) ...Dr.		??
	To Capital Reserve A/c			??
	(Being ___??___)

You are required to complete the journal entries by filling up the missing information represented by '??', including the number of shares and narration, if any.

Savi Ltd. forfeited 50 shares of ₹ 100 each issued at a premium of 10%, on which allotment money of ₹ 30 per share (including premium) and first and final call of ₹ 40 per share were not received.

What is the minimum amount per share at which the company can reissue these shares?

Give the Meaning of Forfeiture of Shares - Accountancy

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Give the Meaning of Forfeiture of Shares - Accountancy

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