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Chapter 8 . Company Accounts—Accounting for Share Capital 8.31

24. Jiyaji Ltd. has an authorised capital of ` 4,00,000 divided into shares of ` 20 each, the whole of which is
issued and subscribed at a premium of ` 2 per share. The amount was payable as:
on application and allotment ` 10 per share, on first call ` 4 per share (including premium) and the balance
as and when required.
The company made both the calls. The application and allotment money was duly received. But a shareholder
holding 2,000 shares failed to pay both the calls and his shares were forfeited. They were later reissued
@ ` 14 per share as fully paid-up.
Pass Journal entries regarding the above. [Ans.: Capital Reserve—` 8,000.]

25. Complete the following Journal entries:
Date Particulars L.F. Dr. (`) Cr. (`)
Share Capital A/c ...Dr. 80,000
To Forfeited Shares A/c 50,000
To Shares First Call A/c 30,000
(1,000 Shares of ` 100 each forfeited for non-payment of first call)
Bank A/c ...Dr. ...(1)...
Forfeited Shares A/c ...Dr. ...(2)...
To Share Capital A/c ...(3)...
(1,000 Shares reissued at ` 70 per share ` 80 paid-up)

...(4)... A/c ...Dr. ...(5)...
To ...(6)... A/c ...(7)...
(Gain on reissue of shares transferred to Capital Reserve)
[Ans.: 1: ` 70,000; 2: ` 10,000; 3: ` 80,000; 4: Forfeited Shares; 5: ` 40,000; 6: Capital Reserve; 7: ` 40,000.]

26. Fill-in-the following blanks:
Dr. FORFEITED SHARES ACCOUNT Cr.
Particulars ` Particulars `
To Share Capital A/c 2,000 By Share Capital A/c 15,000
(Discount on Reissue of 200 shares) (Amount forfeited on 500 shares)
To Capital Reserve A/c ...(1)...
To Balance c/d ...(2)...
...(3)... ...(4)...
[Ans.: 1: ` 4,000; 2: ` 9,000; 3: ` 15,000; 4: ` 15,000.]
[Hints: 1. Calculation of Capital Reserve:
Ê ` 15,000 ˆ
˜
Amount forfeited on 200 shares Á ¥ 200 ` 6,000
Ë 500 ¯
Less: Discount on Reissue of 200 shares ` 2,000
Gain on Reissue transferred to Capital Reserve ` 4,000

` 15,000
2. Closing Balance of Forfeited Shares Account: = ¥ 300 = ` 9,000.]
500