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प्रश्न
The Directors of M Ltd resolved on 1st May, 2015 that 2,000 Equity Shares of ₹ 10 each , ₹ 7.50 paid be forfeited for non-payment of final call of ₹ 2.50 . On 10th June, 2015, 1,800 of these shares were reissued for ₹ 6 per share . Give necessary Journal entries .
उत्तर
Books of M Limited
Journal
|
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
2012 |
|
|
|
|
|
|
May 01 |
Equity Share Capital A/c |
Dr. |
|
20,000 |
|
|
|
To Share Forfeiture A/c |
|
|
15,000 |
|
|
|
To Call-in-Arrears A/c |
|
|
5,000 |
|
|
|
(2,000 shares of Rs 10 each forfeited for non-payment of final call Rs 2.5 per share) |
|
|
|
|
|
|
|
|
|
|
|
|
June 10 |
Bank A/c |
Dr. |
|
10,800 |
|
|
|
Share Forfeiture A/c |
Dr. |
|
7,200 |
|
|
|
To Share Capital A/c |
|
|
18,000 |
|
|
|
(1,800 shares of Rs 10 each re-issued at Rs 6 per share fully paid-up) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Forfeiture A/c |
Dr. |
|
6,300 |
|
|
|
To Capital Reserve A/c |
|
|
6,300 |
|
|
|
(Balance in Shares Forfeiture Account of 1,800 re-issue, transferred to Capital Reserve Account) |
|
|
|
|
Working Notes:
|
Share Forfeiture |
7.5 |
Cr. |
|
Share Forfeiture |
4 |
Dr. |
|
Balance in Share Forfeiture Account after re-issue |
3.5 |
Cr. per share |
Capital Reserve = No. of Shares reissued × Balance in Share Forfeiture Account after reissue (per share)
= 1,800 × Rs 3.5 (per share)
= Rs 6,300
APPEARS IN
संबंधित प्रश्न
What is the maximum amount of discount at which forfeited share can be re-issued?
AB Ltd. invited applications for issuing 75,000 equity shares of Rs.100 each at a premium of Rs.30 per share. The amount was payable as follows:
On Application and Allotment - Rs.85 per share (including premium)
On First and Final call - the balance amount
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.
'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.
'Blur Star Ltd.' was registered with an authorized capital of Rs 2,00,000 divided into 20,000 shares of Rs 10 each. 6,000 of these shares were issued to the vendor for building purchased. 8,000 shares were issued to the public and Rs 5 per share were called up as follows:
On application - Rs 2 per share
On allotment - Rs 1 per share
On the first call - Balance of the called up amount
The amounts received on these shares were as follows:
On 6,000 shares - Full amount called
On 1,250 shares - Rs 3 per share
On 750 shares - Rs 2 per share
The directors forfeited 750 shares on which Rs 2 per share were received.
Pass necessary journal entries for the above transactions in the books of Blue Star 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.
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'.
A Ltd. forfeited 100 equity shares of Rs 10 each issued at a premium of 20% for the non-payment of final call of Rs 5 including premium. State the maximum amount of discount at which these shares can be re-issued?
On 1st April 2012, Blue Heaven Ltd. was formed with an authorised capital of Rs 20,00,000 divided into 2,00,000 equity shares of Rs 10 each. The company issued the prospectus inviting applications for 1,80,000 equity shares. The company received applications for 1,70,000 equity shares. During the first year, Rs 8 per share were called. Ram holding 2,000 shares and Varun holding 4,000 shares did not pay the first call of Rs 2 per share. Varun's shares were forfeited after the first call and later on, 3,000 of the forfeited share were reissued 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.
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
Select the appropriate answer from the alternative given below and rewrite the sentence.
When shares are forfeited, share capital account is _____________.
X Ltd., issued 50,000 shares of Rs 10 each at a premium of Rs 2 per share payable as follows:
Rs 3 on application
Rs 6 on allotment (including premium) and Rs 3 on call
Applications were received for 75,000 shares and a pro-rata allotment was made as follows:
To the applicants of 40,000 shares, 30,000 shares were issued and for the rest 20,000 shares were issued. All money due were received except the allotment and call money from Ram who had applied for 1,200 shares (out of the group of 40,000 shares). All his shares were forfeited. The forfeited shares were re-issued for Rs 7 per share fully paid up. Pass necessary Journal Entries for the above transaction.
(Forfeiture of shares issued at premium)
The Century Ltd. issued 8,000 shares of Rs 100 at a premium of 10% payable as under-
| On Application | Rs 25 | On Allotment | Rs 40 (including premium) |
| On First Call | Rs 20 | On Second Call | Rs 25 |
Company called up allotment and both the calls which were duly received except Ramesh to whom 500 shares were allotted failed to pay allotment and calls. Prepare Journal of Century Ltd.
Long Answer Question
Explain the term ‘Forfeiture of Shares’ and give the accounting treatment on forfeiture.
The Hindustan Manufacturing Ltd. had a total subscribed capital of ₹ 10,00,000 in Equity Shares of ₹ 10 each of which ₹ 7.50 were called-up. A final call of ₹ 2.50 was made and all amount paid except two calls of ₹ 2.50 each in respect of 100 shares held by D . These shares were forfeited and reissued at ₹ 8 per share .
Pass necessary journal entries (including that of cash) to record the transactions of final call , forfeiture of shares and reissue of forfeited shares . Also, prepare the Balance Sheet of the company.
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.
Record the journal entries for forfeiture and reissue of shares in the following cases:
(i) Basak Ltd. forfeited 20 shares of ₹ 10 each, ₹ 7 called-up on which the shareholder had paid application and allotment money of ₹ 5 per share. Out of these, 15 shares were reissued to Naresh as ₹ 7 per share paid-up for ₹ 8 per share.
(ii) Y Ltd. forfeited 90 shares of ₹ 10 each, ₹ 8 called-up issued at a premium of ₹ 2 per share to 'R' for non-payment of allotment money of ₹ 5 per share (including premium). Out of these, 80 shares were reissued to Sanjay as ₹ 8 called-up for ₹ 10 per share.
VT Ltd forfeited 200 shares of ₹ 10 each , issued at a premium of ₹ 5 per share , held by Mohan for non-payment of the final call of ₹ 3 per share . 100 out of these shares were reissued to Narendra at a discount of ₹ 4 per share . Journalise.
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.
Gaurav applied for 5,000 shares of ₹ 10 each at a premium of 2.50 per share. But he was allotted only 2,500 shares on pro rata basis . After having paid ₹ 3 per share on application, he did not pay allotment money of ₹ 4.50 per share (including premium) and on his subsequent failure to pay the first call of ₹ 2 per share, his shares were forfeited. These shares were reissued at the rate of ₹ 8 per share credited as fully paid .
Pass journal entries to record the forfeiture and reissue of shares.
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.
Midee Ltd. invited applications for issuing 27,000 shares of ₹ 100 each payable as follows:
₹ 50—per share on application;
₹ 10—per share on allotment; and
Balance—on First and Final call.
Applications were received for 40,000 shares. Full allotment was made to the applicants of 7,000 shares. The remaining applicants were allotted 20,000 shares on pro rata basis. Excess money received on applications was adjusted towards allotment and call.
Asha, holding 600 shares was belonged to the category of applicants to whom full allotment was made ,paid the call money at the time of allotment . Ankur, who belonged to the category of applicants to whom shares were allotted on pro rata basis did not pay anything after application on his 200 shares . Ankur's shares were forfeited after the First and Final call. These shares were later reissued at ₹ 105 per share as fully paid-up.
Pass necessary journal entries in the books of Midee Ltd . for the above transactions, by opening Calls-in-Arrears and Calls-in-Advance Accounts wherever necessary.
Amrit Ltd. issued 50,000 shares of ₹ 10 each at a premium of ₹ 2 per share payable as ₹ 3 on application, ₹ 4 on allotment (including premium) , ₹ 2 on first call and the remaining on second call.
Applications were received for 75,000 shares and pro rata allotment was made to all the applicants.
All moneys due were received except allotment and first call from Sonu who applied for 1,200 shares. All his shares were forfeited. The forfeited shares were reissued for ₹ 9,600. Final call was not made . Pass necessary Journal entries.
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 .
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.
DF Ltd. invited applications for issuing 50,000 shares of ₹ 10 each at a premium of ₹ 2 per share. The amount was payable as follows:
On Application : ₹ 3 per share (including premium ₹ 1)
On Allotment : ₹ 3 per share (including premium ₹ 1)
On First call : ₹ 3 per share
On Second and Final Call: Balance amount
Application for 70,000 shares was received. Allotment was made on the following basis.
Applications for 5,000 shares – Full
Applications for 50,000 shares – 90%
Balance of the applications was rejected. ₹ 1,11,000 were received on account of allotment. The amount of allotment due from the shareholders to whom shares were allotted on pro-rata basis was fully received. A few shareholders to whom shares were allotted in full, failed to pay the allotment money. ₹ 1,20,000 were received on the first call. Directors decided to forfeit those shares on which allotment and call money were due. Half of the forfeited shares were re-issued @ ₹ 8 per share fully paid up. Final call was not made.
Pass the necessary journal entries for the above transactions in the book of DF Ltd.
Share Forfeiture account is a ________.
Capital reserves are created from ______.
The balance of share forfeited account after the reissue of forfeited shares is transferred to ______.
When a company repurchase its own share from the market to reduce the number of share it is called ______.
What will be the correct sequence of events?
- Forfeiture of shares.
- Default on Calls.
- Re-issue of shares.
- Amount transferred to capital reserve.
Apaar Ltd forfeited 4,000 shares of ₹20 each, fully called up, on which only application money of ₹6 has been paid. Out of these 2,000 shares were reissued and ₹8,000 has been transferred to capital reserve. Calculate the rate at which these shares were reissued.
Shares can be forfeited for?
Z and Co. forfeited 100 shares of ₹ 10 each for non-payment of the final call of ₹ 2 per share. All the forfeited shares were re-issued at ₹ 9 per share. What amount will be transferred to Capital Reserve A/c?
Forfeiture of shares results in the reduction of:
Balance in Share Forfeiture Account is shown in the balance sheet under the head of ______.
When forfeited shares are re-issued the amount of discount allowed on these shares cannot exceed ______.
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 ______.
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.
200 equity shares of ₹10 each issued at par were forfeited for non-payment of first call of ₹3 per share. Final call of ₹2 per share was not yet called. By which amount the share capital will be debited on forfeiture?
