A) Asha Ltd. forfeited 100 equity shares of ₹ 20 each fully called up for non-payment of first call of ₹ 3 per share and final call of ₹ 5 per share. 80 shares of these were reissued at ₹ 15 per share fully paid B) Bhakti Ltd. forfeited 100 equity shares of ₹ 10 each, ₹ 6 called-up on which the shareholder paid application and allotment of ₹ 5 per share. Of these 80 shares were re-issued as fully paid-up for 16 per share. C) Konark Ltd. forfeited 50 shares of ₹ 10 each, ₹ 8 called-up. The shareholder failed to pay first call of ₹ 3 per share. Later on, 30 shares of these were re-issued at ₹ 7 per share. Pass Journal entries for the forfeiture and re-issue of shares in the following cases.

A) Asha Ltd. forfeited 100 equity shares of ₹ 20 each fully called up for non-payment of first call of ₹ 3 per share and final call of ₹ 5 per share. 80 shares of these were reissued at ₹ 15 per share fully paid 

 
B) Bhakti Ltd. forfeited 100 equity shares of ₹ 10 each, ₹ 6 called-up on which the shareholder paid application and allotment of ₹ 5 per share. Of these 80 shares were re-issued as fully paid-up for 16 per share. 
 
C) Konark Ltd. forfeited 50 shares of ₹ 10 each, ₹ 8 called-up. The shareholder failed to pay first call of ₹ 3 per share. Later on, 30 shares of these were re-issued at ₹ 7 per share. 

 

 

Solution:  

 

Journal Entries  

In the Books of Asha Ltd. 

Date	Particulars	J.F	Debit	Credit
A  1.	Equity Share Capital A/c Dr.  To Equity Share First Call A/c    To Equity Share Final Call A/c  To Equity Share Forfeiture A/c  [Being forfeiture of 100 equity shares due to non-payment of first call @ ₹3 and final call @ ₹5 per share]		2,000	300  500  1,200
2.	Bank A/c Dr.  Equity Share Forfeiture A/c Dr.  To Equity Share Capital A/c  [Being re-issue of 80 forfeited shares @ ₹15 per share as fully paid-up]		1,200  400	1,600
3.	Equity Share Forfeiture A/c Dr.  To Capital Reserve A/c  [Being proportion balance of Share Forfeiture A/c transferred to Capital Reserve A/c]		560	560

In the Books of Bhakti Ltd.

Date	Particulars	J.F	Debit	Credit
B  1.	Equity Share Capital A/c Dr.  To Calls-in-Arrears A/c  To Equity Share Forfeiture A/c  [Being forfeited 100 equities share of 10 each]		600	100  500
2.	Bank A/c Dr.  To Equity Share Capital A/c  [Being re-issue of 80 forfeited shares @ ₹ 6 per share as fully paid-up]		480	480
3.	Equity Share Forfeiture A/c Dr.  To Capital Reserve A/c  [Being proportionate balance of Share Forfeiture A/c transferred to Capital Reserve A/c]		400	400

In the Books of Konark Ltd.