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Chapter 8 . Company Accounts—Accounting for Share Capital 8.17
Solution:
Calculation of Amount Received on Allotment:
`
Allotment money due on 40,000 shares @ ` 50 per share 20,00,000
Add: Call money received in advance on 50 shares @ ` 20 per share 1,000
Amount Received on Allotment 20,01,000
Illustration 11.
Give Journal entries to record the following transactions of forfeiture and reissue of shares and
open Forfeited Shares Account in the books of the company.
L Ltd. forfeited 470 Equity Shares of ` 10 each issued at a premium of ` 5 per share for non-
payment of allotment money of ` 8 per share (including share premium ` 5 per share) and
the first and final call of ` 5 per share. All the forfeited shares were subsequently reissued at
` 14 per share. (Delhi 2011, Modified)
Solution: In the Books of L Ltd.
JOURNAL
Date Particulars L.F. Dr. (`) Dr. (`)
Equity Share Capital A/c (470 × ` 10) ...Dr. 4,700
Securities Premium Reserve A/c (470 × ` 5) ...Dr. 2,350
To Forfeited Shares A/c (470 × ` 2) 940
To Equity Shares Allotment A/c (470 × ` 8) 3,760
To Equity Shares First and Final Call A/c (470 × ` 5) 2,350
Or
Equity Share Capital A/c (470 × ` 10) ...Dr. 4,700
Securities Premium Reserve A/c (470 × ` 5) ...Dr. 2,350
To Forfeited Shares A/c (470 × ` 2) 940
To Calls-in-Arrears A/c 6,110
(470 Shares forfeited due to non-payment of allotment and call money)
Bank A/c (470 × ` 14) ...Dr. 6,580
To Equity Share Capital A/c (470 × ` 10) 4,700
To Securities Premium Reserve A/c (470 × ` 4) 1,880
(470 Forfeited shares reissued @ ` 14 per share)
Forfeited Shares A/c ...Dr. 940
To Capital Reserve A/c 940
(Gain on reissue transferred to Capital Reserve)
Dr. FORFEITED SHARES ACCOUNT Cr.
Particulars ` Particulars `
To Capital Reserve A/c 940 By Equity Share Capital A/c 940
940 940