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प्रश्न
'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'.
उत्तर
| In the books of Guru Ltd. Journal Entry |
||||
| Date | Particulars | L.F. |
Dr. Rs |
Cr. Rs |
|
Bank A/c Dr. To Equity Share Application and Allotment A/c (Being amount received on an application for 1,00,000 shares)) |
10,00,000
|
10,00,000
|
||
|
Equity Share Application and Allotment A/c Dr. To Equity Share Capital A/c To Securities Premium A/c To Equity Share First and Final Call A/c To Bank A/c (Being amount of application transferred to Share Capital account and excess money is adjusted in first and final call account) |
10,00,000
|
4,00,000 4,00,000 1,00,000 1,00,000
|
||
|
Equity Share First and Final Call A/c Dr. To Equity Share Capital A/c To Securities Premium A/c (Being amount due on first and final call) |
8,00,000
|
4,00,000 4,00,000
|
||
|
Bank A/c (8,00,000 – 1,00,000 – 14,000) Dr To Equity Share First and Final Call A/c. (Being amount received on share First and Final Call) |
6,86,000
|
6,86,000
|
||
|
Equity Share Capital A/c Dr Securities Premium A/c Dr. To Equity Share Forfeiture A/c To Equity Share First and Final Call A/c (Being Kumar’s shares were forfeited) |
16,000 8,000
|
10,000 14,000
|
||
|
Bank A/c Dr. Equity Share Forfeiture A/c Dr. To Equity Share Capital A/c (Being forfeited shares were reissued for Rs.9 as fully paid up) |
14,400 1,600
|
16,000
|
||
|
Equity Share Forfeiture A/c Dr. To Capital Reserve A/c (Being excess amount on forfeiture is transferred to capital reserve) |
8,400
|
8,400
|
||
Working Notes:
| Categories | Applied Shares |
Shares Allotted |
Received n @ Rs 10 each |
transferred Rs 5 each |
transferred Rs 5 each |
Application on money |
Final Call each |
Receivable on first and final call after Adjusted |
refunded |
| 1 | 10,000 | - | 1,00,000 | - | - | - | - | - | 1,00,000 |
| 2 | 90,000 | 80,000 | 9,00,000 | 4,00,000 | 4,00,000 | 1,00,000 | 8,00,000 (4,00,000 + 4,00,000) |
7,00,000 | |
| 1,00,000 | 80,000 | 10,00,000 | 4,00,000 | 4,00,000 | 1,00,000 | 8,00,000 | 7,00,000 | 1,00,000 |
WN 2: Calculation of Amount not received on First and Final Call
Shares alloted to Kumar = `80000/90000 xx 1800 = 1600` shares
Amount received on 1,800 shares @ Rs 10 each = Rs 18,000
Amount transferred to Share Capital A/c (1,600 x 5) = 8,000
Amount transferred to Securities Premium A/c (1,600 x 5) = 8,000
Excess money received on application = 2,000
Amount due on First and Final Call @ Rs 10 each = 16,000 (8,000 + 8,000)
Amount not received on Securities Premium = 8,000
Amount not received on first and final call = 6,000 (8,000 – 2,000)
WN 3: Calculation of amount credited in Share Forfeiture Account
Amount received on Application and Allotment = Rs 18,000 = 18000
Less : Amount received for Securities Premium = `8000(1600 xx 5)`
Amount to be credited in Share Forfeiture Account = 10000
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.
'X Ltd.' invited applications for issuing 10,000 equity shares of Rs 100 each at a premium of `100 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
The issue was fully subscribed. A shareholder holding 500 shares paid the full share money with an application. Another shareholder holding 200 shares failed to pay the first and final call money. His shares were forfeited. The forfeited shares were re-issued for Rs 19,000 as fully 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'.
'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'
Y Ltd. invited applications for issuing 80,000 equity shares of 10 each at a discount of 10%. The amount was payable as follows:
On applications and allotment - Rs 6 per share
On first and final call - the balance amount
Application for 2,00,000 shares were received. Applications for 40,000 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 1,600 shares applied by Rohan. 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 Y Ltd.
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.
GY Ltd. invited applications for issuing 85,000 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 was received. Applications for 30,000 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 1,700 shares applied by Hari. 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 the company.
Select the appropriate answer from the alternative given below and rewrite the sentence.
When shares are forfeited, share capital account is _____________.
Give one word / Term / phrase for the following statement :
The account to which excess amount on share forfeited a/c is transferred.
State, whether the following statements is True or False.
Share forfeited balance is transferred to Capital Reserve Account.
Long Answer Question
Explain the term ‘Forfeiture of Shares’ and give the accounting treatment on forfeiture.
X Ltd. forfeited 900 Equity Shares of ₹ 100 each for the non-payment of allotment money of ₹ 30 per share and the first call of ₹ 20 per share. The second and final call of ₹ 25 per share has not been made . The forfeited shares were reissued for ₹ 90 per share , ₹ 75 paid-up. Journalise the above.
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 .
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.
Show the forfeiture and reissue entries under each of the following cases:
(i) X Ltd. forfeited 300 shares of ₹ 10 each, ₹ 8 called-up held by Mr. A for non-payment of second call money of ₹ 3 per share. These shares were reissued to Mr. Z for ₹ 10 per share as fully paid-up.
(ii) Y Ltd. forfeited 400 shares of ₹ 10 each, fully called-up, held by Mr. B for non-payment of final call money of ₹ 4 per share. These shares were reissued to Mr. T at ₹ 12 per share as fully paid-up.
(iii) Light Ltd. forfeited 250 shares of ₹ 10 each, fully called-up held by Mr. C for non-payment of allotment money of ₹ 3 per share and first and final call money of ₹ 4 per share. These shares were reissued @ ₹ 8 per share as fully paid-up to Mr. P.
A holds 100 shares of ₹ 10 each on which he has paid ₹ 1 per share on application.
B holds 200 shares of ₹ 10 each on which he has paid ₹ 1 and ₹ 2 per share on application and allotment respectively.
C holds 300 shares of ₹ 10 each and has paid ₹ 1 on application, ₹ 2 on allotment and ₹ 3 on first call. They all fail to pay their arrears and the second call of ₹ 2 per share . Shares are forfeited and subsequently reissued @ ₹ 11 per share as fully paid-up.
journalise the above.
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.
Pass necessary journal entries in the books of the company for the following transactions:
Vishesh Ltd. forfeited 1,000 Equity Shares of ₹ 10 each issued at a premium of ₹ 2 per share for non-payment of allotment money of ₹ 5 per share including premium. The final call of ₹ 2 per share was not yet called on these shares. Of the forfeited shares 800 shares were reissued at ₹ 12 per share as fully paid-up.
The remaining shares were reissued at ₹ 11 per share fully paid-up.
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.
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.
Choose the appropriate alternative from the given options:
On the forfeiture of 100 shares of ₹ 50 each, ₹ 2,500 were credited to share forfeited account. These shares were re-issued at ₹ 25 per share fully paid up. The amount credited to 'Capital Reserve Account' will be:
Money received in advance from shareholders before it is actually called-up by the directors is ______.
The balance of share forfeited account after the reissue of forfeited shares is transferred to ______.
Vishnu Ltd. forfeited 20 shares of ₹10 each, ₹8 called up, on which John had paid application and allotment money of ₹5 per share, of these, 15 shares were reissued to Parker as fully paid up for ₹6 per share. What is the balance in the share Forfeiture Account after the relevant amount has been transferred to Capital Reserve Account?
When shares are forfeited, the Share Capital Account is debited with the:
If the loss on the re-issue of shares is less than the amount forfeited, the 'surplus' or profit is transferred to:
Balance in Share Forfeiture Account is shown in the balance sheet under the head of ______.
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?
If 10,000 shares of ₹ 10 each were forfeited for non-payment of final call money of ₹ 3 per share and only 7,000 shares were re-issued @ ₹ 11 per share as fully paid up, then what is the amount of maximum possible discount that company can allow at the time of re-issue of the remaining 3,000 shares?
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?
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.
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?
Assertion: A company can reissue a forfeited share at an amount which is less than the amount not received on it.
Reason: A company can write off the net loss made on the reissue of a forfeited share from its capital reserve.
Which one of the following is correct?
