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Question
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.
Solution
|
Application |
Rs |
5 |
|
|
Allotment |
Rs |
3 |
(1+2) |
|
First and Final Call |
Rs |
4 |
|
|
|
|
12 |
(10+2) |
Called-up = Application + Allotment
= Rs 5 + 3 (including premium Rs 2)
Book of JCV Limited
Journal
|
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
|
Share Capital A/c (200×6) |
Dr. |
|
1,200 |
|
|
|
Securities Premium A/c (200×2) |
Dr. |
|
400 |
|
|
|
To Share Forfeiture A/c (200×5) |
|
|
1,000 |
|
|
|
To Calls-in-Arrears A/c (200×3) |
|
|
600 |
|
|
|
(200 shares of Rs 10 each on which Rs 8 had called (including Rs 2 premium), forfeited for the non-payment of allotment Rs 3 (including Rs 2 premium) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
800 |
|
|
|
Share Forfeiture A/c |
Dr. |
|
200 |
|
|
|
To Share Capital A/c |
|
|
1,000 |
|
|
|
(100 shares of Rs 10 each re-issued at Rs 8 per share fully paid-up) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Forfeiture A/c |
Dr. |
|
300 |
|
|
|
To Capital Reserve |
|
|
300 |
|
|
|
(Amount of share forfeiture of 100 re-issued shares transferred to Capital Reserve) |
|
|
|
|
Working Note
Share Forfeiture of Re-issued Shares
|
Share Forfeiture (at the time of forfeiture) |
Cr. |
5 |
|
|
Share Forfeiture (at the time of re-issue) |
Dr. |
2 |
|
|
Balance in Share Forfeitre (after re-issue) |
Cr. |
3 |
per share |
Capital Reserve
`= "Amount of share for forfeiture"/"Total share for forfeited" xx "Shares reissued - Loss on reissued of forfeited shares "`
`=1000/200 xx 100 - 100 xx 2 = 500 - 200 = 300`
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| Equity Share Capital A/c | Dr. | ₹X | |
| To share Forfeited A/c | ₹Y | ||
| To Equity Share Allotment A/c | ₹Z |
Here X, Y and Z are:
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When shares are forfeited, the Share Capital Account is debited with the:
A forfeited share can ______
Based on the below information, you are required to answer the following question:
|
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