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Agni Ltd. forfieted 800 shares of Rs.10 each, issued at 30% premium for non-payment of allotment money of Rs.5 per share (including premium) and first call of Rs.2 per share. The second call and final call of Rs.2 has not yet been called. out of these, 200 shares were reissued as fully paid up for Rs.11 per share.
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?Agni Ltd. forfieted 800 shares of Rs.10 each, issued at 30% premium f...
1)Share capital a/c dr. 6400Sec. Pre. Res.a/c dr. 2400 To share forfieted a/c 3200 To calls in arrears a/c. 56002)Bank a/c. Dr 2200 To share capital a/c. 2000 To sec. Pre. Res. A/c. 2003)share forfieture a/c Dr. 800 To cap. reserve a/c 800
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?Agni Ltd. forfieted 800 shares of Rs.10 each, issued at 30% premium f...
Introduction
In this scenario, Agni Ltd. has forfeited 800 shares of Rs.10 each, issued at a 30% premium, for non-payment of allotment money and the first call. Out of these forfeited shares, 200 were reissued as fully paid up for Rs.11 per share. Let's understand the process and accounting treatment for the forfeited shares and the reissued shares.
Forfeiture of Shares
When a shareholder fails to pay the allotment money or call money on shares, the company has the right to forfeit those shares. The forfeited shares become the property of the company. In this case, Agni Ltd. forfeited 800 shares for non-payment of allotment money of Rs.5 per share (including premium) and the first call of Rs.2 per share.
Journal Entry for Forfeiture of Shares
The journal entry for the forfeiture of shares is as follows:
- Bank Account Dr. (Allotment and First Call Money) – Rs.6,400
- Share Allotment Account Cr. – Rs.4,000
- Share Capital Account Cr. – Rs.2,400
- Forfeited Shares Account Dr. – Rs.8,000
- Share Capital Account Cr. – Rs.8,000
Reissue of Shares
After the forfeiture of shares, the company can reissue them to new shareholders. In this case, Agni Ltd. reissued 200 shares as fully paid up for Rs.11 per share. This means that the new shareholders paid the full amount for the shares, including the allotment money, call money, and premium.
Journal Entry for Reissue of Shares
The journal entry for the reissue of shares is as follows:
- Bank Account Dr. (Amount Received on Reissue) – Rs.2,200
- Forfeited Shares Account Cr. – Rs.2,000
- Share Capital Account Cr. – Rs.200
Conclusion
Forfeiture and reissue of shares are important processes in the management of a company's share capital. By forfeiting shares, the company can ensure that shareholders fulfill their obligations to pay for their shares. By reissuing shares, the company can raise new capital and bring in new shareholders. It is important to follow the correct accounting treatment for these transactions to ensure accurate financial reporting.
In this scenario, Agni Ltd. has forfeited 800 shares of Rs.10 each, issued at a 30% premium, for non-payment of allotment money and the first call. Out of these forfeited shares, 200 were reissued as fully paid up for Rs.11 per share. Let's understand the process and accounting treatment for the forfeited shares and the reissued shares.
Forfeiture of Shares
When a shareholder fails to pay the allotment money or call money on shares, the company has the right to forfeit those shares. The forfeited shares become the property of the company. In this case, Agni Ltd. forfeited 800 shares for non-payment of allotment money of Rs.5 per share (including premium) and the first call of Rs.2 per share.
Journal Entry for Forfeiture of Shares
The journal entry for the forfeiture of shares is as follows:
- Bank Account Dr. (Allotment and First Call Money) – Rs.6,400
- Share Allotment Account Cr. – Rs.4,000
- Share Capital Account Cr. – Rs.2,400
- Forfeited Shares Account Dr. – Rs.8,000
- Share Capital Account Cr. – Rs.8,000
Reissue of Shares
After the forfeiture of shares, the company can reissue them to new shareholders. In this case, Agni Ltd. reissued 200 shares as fully paid up for Rs.11 per share. This means that the new shareholders paid the full amount for the shares, including the allotment money, call money, and premium.
Journal Entry for Reissue of Shares
The journal entry for the reissue of shares is as follows:
- Bank Account Dr. (Amount Received on Reissue) – Rs.2,200
- Forfeited Shares Account Cr. – Rs.2,000
- Share Capital Account Cr. – Rs.200
Conclusion
Forfeiture and reissue of shares are important processes in the management of a company's share capital. By forfeiting shares, the company can ensure that shareholders fulfill their obligations to pay for their shares. By reissuing shares, the company can raise new capital and bring in new shareholders. It is important to follow the correct accounting treatment for these transactions to ensure accurate financial reporting.
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?Agni Ltd. forfieted 800 shares of Rs.10 each, issued at 30% premium for non-payment of allotment money of Rs.5 per share (including premium) and first call of Rs.2 per share. The second call and final call of Rs.2 has not yet been called. out of these, 200 shares were reissued as fully paid up for Rs.11 per share.
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?Agni Ltd. forfieted 800 shares of Rs.10 each, issued at 30% premium for non-payment of allotment money of Rs.5 per share (including premium) and first call of Rs.2 per share. The second call and final call of Rs.2 has not yet been called. out of these, 200 shares were reissued as fully paid up for Rs.11 per share. for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about ?Agni Ltd. forfieted 800 shares of Rs.10 each, issued at 30% premium for non-payment of allotment money of Rs.5 per share (including premium) and first call of Rs.2 per share. The second call and final call of Rs.2 has not yet been called. out of these, 200 shares were reissued as fully paid up for Rs.11 per share. covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for ?Agni Ltd. forfieted 800 shares of Rs.10 each, issued at 30% premium for non-payment of allotment money of Rs.5 per share (including premium) and first call of Rs.2 per share. The second call and final call of Rs.2 has not yet been called. out of these, 200 shares were reissued as fully paid up for Rs.11 per share..
?Agni Ltd. forfieted 800 shares of Rs.10 each, issued at 30% premium for non-payment of allotment money of Rs.5 per share (including premium) and first call of Rs.2 per share. The second call and final call of Rs.2 has not yet been called. out of these, 200 shares were reissued as fully paid up for Rs.11 per share. for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about ?Agni Ltd. forfieted 800 shares of Rs.10 each, issued at 30% premium for non-payment of allotment money of Rs.5 per share (including premium) and first call of Rs.2 per share. The second call and final call of Rs.2 has not yet been called. out of these, 200 shares were reissued as fully paid up for Rs.11 per share. covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for ?Agni Ltd. forfieted 800 shares of Rs.10 each, issued at 30% premium for non-payment of allotment money of Rs.5 per share (including premium) and first call of Rs.2 per share. The second call and final call of Rs.2 has not yet been called. out of these, 200 shares were reissued as fully paid up for Rs.11 per share..
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?Agni Ltd. forfieted 800 shares of Rs.10 each, issued at 30% premium for non-payment of allotment money of Rs.5 per share (including premium) and first call of Rs.2 per share. The second call and final call of Rs.2 has not yet been called. out of these, 200 shares were reissued as fully paid up for Rs.11 per share., a detailed solution for ?Agni Ltd. forfieted 800 shares of Rs.10 each, issued at 30% premium for non-payment of allotment money of Rs.5 per share (including premium) and first call of Rs.2 per share. The second call and final call of Rs.2 has not yet been called. out of these, 200 shares were reissued as fully paid up for Rs.11 per share. has been provided alongside types of ?Agni Ltd. forfieted 800 shares of Rs.10 each, issued at 30% premium for non-payment of allotment money of Rs.5 per share (including premium) and first call of Rs.2 per share. The second call and final call of Rs.2 has not yet been called. out of these, 200 shares were reissued as fully paid up for Rs.11 per share. theory, EduRev gives you an
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