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Question
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.
Solution
Books of X Limited
Journal
|
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
|
Share Capital A/c (100 × 8) |
Dr. |
|
800 |
|
|
|
Securities Premium A/c (100 × 2) |
Dr. |
|
200 |
|
|
|
To Share Forfeiture A/c (100 × 5) |
|
|
500 |
|
|
|
To Calls-in-Arrears A/c (100 × 5) |
|
|
500 |
|
|
|
(100 shares of Rs 10 each, Rs 8 called-up with premium Rs 2 per share, forfeited for the non-payment of Rs 5 each including Rs 2 premium) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
490 |
|
|
|
Share Forfeiture A/c |
Dr. |
|
70 |
|
|
|
To Share Capital A/c |
|
|
560 |
|
|
|
(70 shares of Rs 10 each re-issued at Rs 7 per share, Rs 8 paid-up) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Forfeiture A/c |
Dr. |
|
280 |
|
|
|
To Capital Reserve A/c |
|
|
280 |
|
|
|
(Balance of 70 shares re-issued shares in Share Forfeiture Account transferred to Capital Reserve) |
|
|
|
|
Working Note-
|
Share Forfeiture Credit |
5 |
per share |
|
Less: Share Forfeiture Debit |
1 |
per share |
|
Balance in Share Forfeiture of re-issued shares |
4 |
per share |
Capital Reserve = Balance in Share Forfeiture Account of re-issued shares × No. of shares re-issued
= 70 × 4
= Rs 280
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|
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What is the amount of security premium reflected in the balance sheet at the end of the year?
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