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Question
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.
Solution
Books of Hindustan Manufacturing Limited
Journal
|
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
|
|
|
|
|
|
|
|
Equity Share Final Call A/c |
Dr. |
|
2,50,000 |
|
|
|
To Equity Share Capital A/c |
|
|
2,50,000 |
|
|
|
(Share Final Call due on 1,00,000 shares at Rs 2.5 per share) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
2,49,750 |
|
|
|
Calls-in-Arrears A/c |
Dr. |
|
250 |
|
|
|
To Equity Share Final Call A/c |
|
|
2,50,000 |
|
|
|
(Share Final Call of Rs 2.5 per share received from 99,900 shares and 100 shares did not pay it) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share Capital A/c |
Dr. |
|
1,000 |
|
|
|
To Share Forfeiture A/c |
|
|
500 |
|
|
|
To Calls-in-Arrears A/c |
|
|
500 |
|
|
|
(100 shares of Rs 10 each forfeited for the non-payment of two calls of Rs 2.5 each) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
800 |
|
|
|
Share Forfeiture A/c |
Dr. |
|
200 |
|
|
|
To Equity Share Capital A/c |
|
|
1,000 |
|
|
|
(100 shares of Rs 10 each reissued at Rs 8 per share, fully paid-up) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Forfeiture A/c |
Dr. |
|
300 |
|
|
|
To Capital Reserve A/c |
|
|
300 |
|
|
|
(Balance in Share Forfeiture Account after re-issue of shares, transferred to Capital Reserve) |
|
|
|
|
As per the Schedule III of Companies Act, 2013, the Company's Balance Sheet is presented as follows.
Hindustan Manufacturing Ltd.
Balance Sheet
|
Particulars |
Note No. |
Amount (Rs) |
|
I. Equity and Liabilities |
|
|
|
1. Shareholders’ Funds |
|
|
|
a. Share Capital |
1 |
10,00,000 |
|
b. Reserves and Surplus |
2 |
300 |
|
2. Non-Current Liabilities |
|
|
|
3. Current Liabilities |
|
|
|
Total |
|
10,00,300 |
|
II. Assets |
|
|
|
1. Non-Current Assets |
|
|
|
2. Current Assets |
|
|
|
a. Cash and Cash Equivalents |
3 |
10,00,300 |
|
Total |
|
10,00,300 |
NOTES TO ACCOUNTS
|
Note No. |
Particulars |
Amount (Rs) |
|
1 |
Share Capital |
|
|
|
Authorised Share Capital |
|
|
|
1,00,000 shares of Rs 10 each |
10,00,000 |
|
|
Issued Share Capital |
|
|
|
1,00,000 shares of Rs 10 each |
10,00,000 |
|
|
Subscribed, Called-up and Paid-up Share Capital |
|
|
|
1,00,000 shares of Rs 10 each |
10,00,000 |
|
2 |
Reserves and Surplus |
|
|
|
Capital Reserve |
300 |
|
3 |
Cash and Cash Equivalents |
|
|
|
Cash at Bank |
10,00,300 |
Working Notes:
|
Share Forfeiture Credit (100 shares × Rs 5 each) |
500 |
|
|
Less: Share Forfeiture Debit (100 share × Rs 2 each) |
200 |
Loss on re-issue |
|
Balance in Share Forfeiture Account after re-issue |
300 |
|
Capital Reserve = Balance in Share Forfeiture Account after re-issue = Rs 300
APPEARS IN
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Answer in one Sentence only :
Give the full form of SEBI.
(Forfeiture of shares issued at par)
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| On Application : | Rs 2 | On Allotment : | Rs 3 |
| On First Call : | Rs 3 | On Second Call : | Rs.2 |
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Record the above transactions in books of Vijay Ltd.
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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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Pass necessary journal entries for forfeiture and reissue of forfeited shares in the following cases:
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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.
Hero Ltd. was registered with a capital of ₹ 5,00,000 divided into 20,000 shares of ₹ 25 each, payable as:
| On Application | ₹ 5 per share |
| On Allotment | ₹ 10 per share |
| On Call | The Balance |
The company offered to the public for subscription 10,000 shares. It received applications for 11,100 shares.
From amongst the applicants:
- Vimal, who had applied for 1,200 shares, paid ₹ 6,000 on application. but was allotted only 600 shares.
- Mohan applied for 1,000 shares, paid the full amount of ₹ 25,000 with his application but was allotted only 500 shares.
- Vineet, who had applied for 1,500 shares, paid his application and allotment money in order but did not pay the call money.
- The remaining applicants paid as and when due.
The surplus money paid by both Vimal and Mohan was used towards allotment and call and any surplus beyond the call was refunded. The company forfeited Vineet’s shares and later re-issued 500 of the forfeited shares @ ₹ 20 per share fully paid up.
You are required to pass journal entries in the books of Hero Ltd.
