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Question
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.
Solution
|
Application |
25 |
Balancing Figure |
|
Allotment |
30 |
|
|
First Call |
20 |
|
|
Final Call |
25 |
Un-called |
|
|
100 |
|
Called-up Rs 75 per share
Books of X Limited
Journal
|
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
|
Equity Share Capital A/c (900×75) |
Dr. |
|
67,500 |
|
|
|
To Share Forfeiture A/c |
|
|
22,500 |
|
|
|
To Calls-in-Arrears A/c |
|
|
45,000 |
|
|
|
(900 shares of Rs 100 each Rs 75 called-up, forfeited for the non-payment sum of allotment Rs 30 and first call Rs 20 per share) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
81,000 |
|
|
|
To Share Capital A/c |
|
|
67,500 |
|
|
|
To Securities Premium A/c |
|
|
13,500 |
|
|
|
(900 shares of Rs 100 each re-issued as Rs 75 paid-up for Rs 90 each) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Forfeiture A/c |
Dr. |
|
22,500 |
|
|
|
To Capital Reserve A/c |
|
|
22,500 |
|
|
|
(Balance of Share Forfeiture Account after re-issue, transferred to Capital Reserve Account) |
|
|
|
|
Working Notes-
Share forfeiture Account Credit
= Share application money received for 900 shares
= Rs 25 × 900 shares
= Rs 22500
Calculation of Capital reserve
Share forfeiture Account Credit = Rs 22500
Share forfeiture Account Debit = NIL
Capial Reserve = Rs 22500
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NH Ltd, with an authorized capital of ₹ 10,00,000 divided into 1,00,000 Equity shares of ₹10 each, issued 50,000 shares to the public at a premium of ₹ 2 per share, payable as follows:
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The above 6,000 shares were forfeited by the company and 5,000 of these (including the shares which had been allotted to Ravi) were reissued at ₹ 8 per share as fully paid-up.
You are required to pass journal entries to record the above transactions in the books of the company.
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?
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.
