Ownclasses

Give Journal entries to record the following transactions of forfeiture and re-issue of shares and open share forfeited account in the books of the respective companies.
(i) C Ltd. forfeited 1000 shares of Rs. 100 each issued at a discount of 8% on these shares the first call of Rs. 30 per share was not received and the final call of Rs. 20 per share was yet to be called. These shares were subsequently re-issued at Rs. 70 per share Rs. 80 paid up.
(ii) L Ltd. forfeited 470 Equity Shares of Rs. 10 each issued at a premium of Rs. 5 per share for non-payment of allotment money of Rs. 8 per share (including share premium Rs. 5 per share) and the first and final call of Rs. 5 per share. Out of these 60 Equity Shares were subsequently re-issued at Rs. 14 per share.

Answer

Date

Particulars

LF

Debit (Rs)

Credit (Rs)

 

 

Share Capital A/c (1000 x 80)       Dr

 

                  To Forfeited Share A/c (1000 x 42)

                 

To Discount on Issue of Share A/c

(1000 x 8)

 

                   To Share First Call A/c (1000 x 30 )  / Calls in Arrears A/c

 

(Being 1000 Shares Forfeited due to non payment of first call)

 

 

 

 

80000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 70000

 

8000

 

2000

 

 

 

 

 

 40000

 

 

 

 

42000

 

 

8000

 

 

30000

 

 

 

 

 

 

 

 

 

 

 

 
80000

 

 

 

 

 

 
 40000

 

 

Bank A/c      1000 x 70)             Dr

 

Discount on Issue of Share A/c    Dr

 

Forfeited Share A/c                   Dr

 

            To Share Capital A/c (1000 x 80)

 

(Being 1000 shares re – issued as Rs. 80 called up at Rs. 70 per share)

 

 

Forfeited Share A/c                    Dr

 

To Capital Reserve A/c

 

(Being the profit on re- issued shares transferred to Capital Reserve A/c)


                                                             

Forfeited share Account


Particulars

Amount

Particulars

Amount

 

To share capital a/c

 

To capital reserve

 

2000

 

40000

 

 

By share capital a/c

 

42000

 

 

 

 

42000

 

42000

 


(ii)

Date

Particulars

Lf

Debit (Rs)

Credit (Rs)

 

 

Equity Share Capital A/c

 (470 x 10)                               Dr

 

Securities Premium A/c (470 x 5) Dr

 

To Forfeited Share A/c

 (470 x 2)

 

To Equity Share Allotment A/c

 (470 x 8)

 

To Equity Share First & Final Call A/c (470 x 5)

                      

 

 OR

 

Equity Share Capital A/c

 (470 x 10)                               Dr

 

 Securities Premium A/c

(470 x 5)                                 Dr

 

To Forfeited Share A/c

(470 x 2)

 

To Calls in Arrears A/c

 

 (Being 470 shares forfeited)

 

 

 

 

4700

 

2350

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4700

 

 

 

2350

 

 

 

 

 

 

 

840

 

 

 

 

 

 

 

 

 

 

120

 

 

 

 

 

 

940

 

 

470

 

 

 

2350

 

 

 

 

 

 

 

 

 

 

 

940

 

 

6110

 

 

 

 

600

 

240

 

 

 

 

 

 

 

 

120

 

Bank A/c (60 x 14 ) Dr

 

  To Equity Share Capital A/c

 (60 x 10)

 To Security Premium A/c

(60 x 4)

 

(Being 60 shares re issued @ of Rs. 14 per  share)

 

 

Forfeited Shares A/c Dr

 

                To Capital Reserve A/c

 

(Being the profit on re-issued shares transferred to capital reserve A/c)

Forfeited shares account

Particulars

Rs

Particulars

Rs

To capital Reserve a/c

 

To balance c/d

120

 

820

By share capital a/c

940

 

940

 

940

 

Note: Amount of Forfeited shares transferred to capital reserve A/c = 940 x 60 / 470  =  Rs. 120