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8.16 Double Entry Book Keeping—CBSE XII
Illustration 9.
XYZ Ltd. issued 50,000 Equity Shares of ` 10 each at a premium of ` 2 per share payable, ` 3
per share on application, ` 5 per share on allotment, ` 2 per share on first call and the balance
on second call. Unpaid amount towards Allotment and Calls Money was transferred to Calls-
in-Arrears Account. Mahima was allotted 800 shares. Pass Journal entries for forfeiture in the
books of the company in the following cases:

Case 1: Mahima paid application and allotment money when due but could not pay first
and second calls. Her shares were forfeited.

Case 2: Mahima could not pay the allotment and the first call money. Her shares were
forfeited after the first call.

Solution: JOURNAL OF XYZ LTD.
Date Particulars L.F. Dr. (` ) Cr. (`)
Case 1 Equity Share Capital A/c (800 × ` 10) ...Dr. 8,000
To Calls-in-Arrears A/c [(800 × ` 2) + (800 × ` 2)] 3,200
To Forfeited Shares A/c (800 × ` 6) 4,800
(800 Equity Shares forfeited for non-payment of first and
second calls)
Case 2 Equity Share Capital A/c (800 × ` 8) ...Dr. 6,400
Securities Premium Reserve A/c (800 × ` 2) ...Dr. 1,600
To Calls-in-Arrears A/c [(800 × ` 5) + (800 × ` 2)] 5,600
To Forfeited Shares A/c (800 × ` 3) 2,400
(800 Equity Shares forfeited for non-payment of allotment
and first call)

Illustration 10.
Nandan, a Director of ‘Nanda Agro Products Ltd.’, proposed in a Board Meeting that to
inculcate the habit of savings among people he wanted to bring a special issue of shares. His
proposal was accepted by the company.
The company issued 40,000 equity shares of ` 100 each. The share money per share was
payable as:
On Application—` 30,

On Allotment—` 50,
On First and Final Call—` 20.
Raman, a farmer holding 80 shares could not pay his call money on time. Nathan, another
farmer holding 50 shares, paid the call money also with allotment.
Raman paid the amount due from him after four months explaining the reason for delay; the
company did not charge any interest from him.
Calculate the amount received by the company on attotment. (Delhi 2016 C)