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प्रश्न
XYZ Ltd. invited applications for 40,000 equity shares of Rs.100 each at a discount of 6%. The amount was payable as follows:
On Application and Allotment - Rs.90 per share
On First and Final call - the balance amount.
Applications for 60,000 shares were received. Applications for 10,000 shares were rejected and shares were allotted on pro-rata basis to remaining applicants. Excess application money received on application and allotment was adjusted towards sums due on first and final call. The calls were made. A shareholder, who applied for 50 share, failed to pay the first and final call money. His shares were forfeited. All the forfeited shares were re-issued at Rs.97 per share fully paid up. Pass necessary journal entries for the above transactions in the books of XYZ Ltd.
उत्तर
Journal Entries
| Date | Particulars | L.F. | Debit (Rs.) | Credit (Rs.) |
|
Bank A/c Dr. To Equity Share Application and Allotment A/c (Being application money received on 60,000 shares)
Share Application and Allotment A/c Dr. Discount on Issue of Share A/c Dr. To Equity share capital A/c To Equity share First and Final Call A/c To Bank A/c (Being application and allotment money is transferred adjusted and the refund is done)
Equity Share First and Final Call A/c Dr. To Equity share capital A/c (Being first call due on 40,000 shares) |
54,00,000
54,00,000 2,40,000
1,60,000
|
54,00,000
38,40,000 1,60,000 16,40,000
1,60,000
|
Important Note: This question can't be solved further because the shar ehold er has already paid excess amount than required on first and final call as he has applied for 50 shares and 40 shares are allotted to him `[40000/50000xx50=40]`
Calculation of excess amount received from him
Amount received =50 × 90 = Rs.4,500
Less: Amount that is to be received= 40 × 90 = Rs.3,600
Excess money received = Rs.900
Amount due on first and final call = 40 x 4 = Rs.160
Now, he has already paid the amount of its 900 in excess at the time of application and allotment. Thus, forfeiture is not possible in this case.
Thus, this question has incomplete or wrong information, hence, cannot be solved fully.
Amount paid by 50,000 shares = Rs.45,00,000
Less: Amount that is required to be paid = Rs.36,00,000
Excess Application money received = Rs.9,00,000
Less: Amount due on first and final call = Rs.1,60,000
Amount refunded through bank = Rs.7,40,000
Add: Amount to be refunded = Rs.9,00,000
Total = Rs.16,40,000
APPEARS IN
संबंधित प्रश्न
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.
'Amrit Dhara Ltd.' invited applications for issuing 80,000 equity shares of Rs 10 each. The amount was payable as follows:
On application and allotment - Rs 2 per share
On the first call - Rs 4 per share
On the second and final call the balance
Applications for 1,00,000 shares were received. Shares were allotted on pro-rata basis to all the
applicants. Excess money received with applications was adjusted towards sums due on the first call. Manohar who had applied for 2,000 shares failed to pay the first call and his shares were immediately forfeited. Afterwards, a second and final call was made. Mahan who was allotted 2,400 shares failed to pay the second and final call. His shares were also forfeited. All the forfeited shares were re-issued at Rs 9 per share as fully paid up.
Pass necessary Journal Entries in the books of the company for the above transactions
'Sulabh Ltd.' invited applications for issuing 1,50,000 equity shares of Rs 10 each at a premium of Rs 3 per share. The amount was payable as follow
On application - Rs 2 per share
On allotment - Rs 6 per share (including premium)
On first and final call - the balance
Applications for 2,00,000 shares were received and shares were allotted on pro-rata basis to all the applicants. Excess money received with applications was adjusted towards sums due on allotment. Suman who had applied for 2,000 shares failed to pay the allotment and call money. Raman failed to pay the first and final call on his 500 shares. Shares of both Suman and Raman were forfeited after the final call was made. The forfeited shares were re-issued for Rs 12 per share as fully paid up.
Pass necessary Journal Entries for the above transactions in the books of the company.
Luxury Cars Ltd.' invited applications for issuing 10,000 equity shares of Rs 50 each at a premium of Rs 100 per share. The amount was payable as follows :
On application - Rs 75 per share (including Rs 50 premium)
On allotment - The balance
The issue was fully subscribed. A shareholder holding 400 shares paid his entire share money at the time of application. Another shareholder holding 300 shares did not pay the allotment money. His shares were forfeited. The forfeited shares were later on re-issued for Rs 90 per share as fully paid up.
Pass necessary journal entries for the above transaction in the books of the company.
'Guru Limited' invited applications for issuing 80,000 equity shares of Rs 10 each at a premium of Rs 10 per share. The amount was payable as follows:
On application and allotment - Rs 10 (including Rs 5 premium)
On first and final call - Rs 10 (including Rs 5 premium)
Applications for 1,00,000 share were received. Applications for 10,000 shares were rejected and
application money was refunded. Shares were allotted on pro-rata basis to the remaining applicants. Excess application money received from applicants to whom shares were allotted on pro-rata basis was adjusted towards sums due on first and final call. All calls were made and were duly received except the first and final call money from Kumar who had applied for 1,800 shares. His shares were forfeited. The forfeited shares were re-issued at Rs 9 per share as fully paid up. Pass necessary journal entries for the above transactions in the books of 'Guru 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'.
'Kalyan Limited' invited applications for issuing 90,000 equity shares of Rs 10 each at a discount of 8%. The amount was payable as follows:
On application — Rs 2 per share
On allotment — Rs 3 per share
On first and final call — The balance
Application for 87,000 shares was received. Shares were allotted to all the applicants. A shareholder, Shyam who had applied for 1,600 shares failed to pay the allotment money and his shares were immediately forfeited. Later on, the first and final call was made. Another shareholder Ram, to whom 1,500 shares were allotted failed to pay the first and final call. His shares were also forfeited. Out of the forfeited shares, 2,000 shares were re-issued at Rs 9 per share as fully paid-up. The re-issued shares included all the shares of Ram.
Pass necessary journal entries for the above transactions in the books of 'Kalyan Limited'
On 1st April 2012, Vishwas Ltd. was formed with an authorised capital of Rs 10,00,000 divided into 1,00,000 equity shares of Rs 10 each. The company issued the prospectus inviting applications for 90,000 equity shares. The company received applications for 85,000 equity shares. During the first year, Rs 8 per share were called. Ram holding 1,000 shares and Shyam holding 2,000 shares did not pay the first call of Rs 2 per share. Shyam'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, `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 _____________.
State, whether the following statements is True or False.
A public company forfeits share on non-payment of final call only.
Long Answer Question
Explain the term ‘Forfeiture of Shares’ and give the accounting treatment on forfeiture.
Super Star Ltd. makes an issue of 10,000 Equity Shares of ₹ 100 each, payable as:
| On application and allotment | ₹ 50 per share, |
| On first call | ₹ 25 per share, |
| On second and final call | ₹ 25 per share. |
Members holding 400 shares did not pay the second and final call and the shares are duly forfeited, 200 of which are reissued as fully paid-up @₹ 50 per share. Pass journal entries in the books of the company.
Sunshine Ltd. issued 20,000 shares of ₹ 100 each payable ₹ 25 per share on application , ₹ 25 per share on allotment and the balance in two calls of ₹ 25 each. The company did not make the final call of ₹ 25 per share. All the money was duly received with the exception of the amount due on the first call on 400 shares held by Mr. Modi. The Board of Directors forfeited these shares and subsequently reissued them @ ₹ 75 per share paid-up for a sum of ₹ 28,000.
Journalise the above transactions and prepare Share Capital Account.
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.
Star Ltd. forfeited 500 Equity Shares of ₹ 100 each for non-payment of first call of ₹ 30 per share . The final call of ₹ 10 per share was not yet made. Out of these, 60% shares were reissued for ₹ 39,000 fully paid. journalise the forfeiture and reissue of shares.
The Directors of a company forfeited 300 shares of ₹ 10 each issued at a premium of ₹ 3 per share , for the non-payment of the first call money of ₹ 2 per share . The final call of ₹ 2 per share has not been made. Half the forfeited shares were reissued at ₹ 1,500 as fully paid-up. Record the 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.
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.
Sukanya Ltd. invited applications for issuing 1,00,000 equity shares of ₹ 10 each. The shares were issued at a premium of ₹ 20 per share. The amount was payable as follows:
| On Application and Allotment | -- | ₹ 14 per share (including premium of ₹ 10), |
| On First Call | -- | ₹ 8 per share (including premium of ₹ 5), |
| On Final Call | -- | ₹ 8 per share (including premium of ₹ 5). |
Applications for 96,000 shares were received. Rohit , a shareholder holding 7,000 shares, failed to pay both the calls and Namit , a holder of 5,000 shares , did not pay the final call.
Shares of Rohit and Namit were forfeited . Of the forfeited shares 8,000 shares including all the shares of Rohit were reissued to Reena at ₹ 8 per share fully paid-up.
Pass necessary journal entries for the above transactions in the books of Sukanya Ltd.
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.
Capital reserves are created from ______.
Money received in advance from shareholders before it is actually called-up by the directors is ______.
Balance of share forfeiture account is shown in the balance sheet under the item ______.
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?
Forfeiture of shares results in the reduction of:
Balance of Forfeited Shares Account after reissue of forfeited shares is transferred to ______.
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 ______.
Based on the below information, you are required to answer the following question:
|
Nidiya Limited was incorporated on 1st 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 is the amount of security premium reflected in the balance sheet at the end of the year?
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.
Pass necessary journal entries for forfeiture and reissue of forfeited shares in the following cases:
Deepak Ltd. forfeited 800 shares of ₹ 10 each, ₹ 8 per share called up, for non-payment of first call of ₹ 3 per share. All the forfeited shares were reissued for ₹ 12 per share fully paid.
MV Ltd. was registered with a capital of ₹ 2,00,000 divided into 10,000 Equity shares of ₹ 20 each payable as follows:
| On Application | ₹ 5 per share |
| On Allotment | ₹ 7 per share |
| On First & Final Call | ₹ 8 per share |
The company offered 5,000 shares to the public for subscription. It received applications for 6,700 shares.
From amongst the applicants:
- Vimal, who had applied for 1,500 shares, paid ₹ 7,500 on application, but was allotted only 800 shares.
- Abhay, who had applied for 2,000 shares, paid the full amount of ₹ 40,000 with his application, but was allotted only 1,000 shares.
- Nitin, who had applied for and allotted 500 shares, did not pay the allotment and call money when due.
- The remaining applicants paid as and when due.
The surplus money paid by both Vimal and Abhay was used towards allotment and call and any surplus beyond the call was refunded.
The company forfeited Nitin's shares after the final call.
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.
