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Question
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 .
Solution
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
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|
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What amount of share forfeiture would be reflected in the balance sheet?
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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.
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