Commerce Exam > Commerce Questions > Application Were received for 80000 share@ 10...
Start Learning for Free
Application Were received for 80000 share@ 10 each at a premium of Rs 2 per share payable on allotment payment to be made as follow: Rs 2 on application, Rs 6 on allot and Balance amount o first and final call. All call money dully received except on 5000 share which Were forfeited. Pass journal entry for forfeited ?
Most Upvoted Answer
Application Were received for 80000 share@ 10 each at a premium of Rs ...
Community Answer
Application Were received for 80000 share@ 10 each at a premium of Rs ...
Journal Entry for Forfeiture of Shares:
When shares are forfeited, it means that the shareholder failed to pay the remaining amount due on the shares. In this case, 5,000 shares were forfeited as the call money on these shares was not received. Let's understand how to record the journal entry for the forfeiture of shares.
1. Calculate the amount forfeited:
Number of shares forfeited = 5,000 shares
Face value of each share = Rs 10
Premium per share = Rs 2
Total amount forfeited = Number of shares forfeited × (Face value + Premium)
= 5,000 × (10 + 2)
= Rs 60,000
2. Record the forfeiture:
Forfeiture of Shares A/c Dr. Rs 60,000
(Being the forfeited amount recorded)
To Share Capital A/c Rs 50,000
To Share Premium A/c Rs 10,000
(Being the face value and premium of forfeited shares transferred back to the respective accounts)
3. Record the share capital and premium on the forfeited shares:
Share Capital A/c Dr. Rs 50,000
(Being the face value of forfeited shares transferred back to the share capital account)
Share Premium A/c Dr. Rs 10,000
(Being the premium of forfeited shares transferred back to the share premium account)
To Calls-in-Advance A/c Rs 60,000
(Being the amount of calls in advance adjusted against the forfeited shares)
Explanation:
- The first entry records the forfeiture of shares by debiting the Forfeiture of Shares account with the forfeited amount of Rs 60,000.
- The second entry transfers the face value of the forfeited shares of Rs 50,000 back to the Share Capital account and the premium of Rs 10,000 back to the Share Premium account.
- The third entry adjusts the amount of calls in advance of Rs 60,000 against the forfeited shares.
By recording these entries, the company accounts for the forfeiture of shares and adjusts the share capital and premium accordingly.
When shares are forfeited, it means that the shareholder failed to pay the remaining amount due on the shares. In this case, 5,000 shares were forfeited as the call money on these shares was not received. Let's understand how to record the journal entry for the forfeiture of shares.
1. Calculate the amount forfeited:
Number of shares forfeited = 5,000 shares
Face value of each share = Rs 10
Premium per share = Rs 2
Total amount forfeited = Number of shares forfeited × (Face value + Premium)
= 5,000 × (10 + 2)
= Rs 60,000
2. Record the forfeiture:
Forfeiture of Shares A/c Dr. Rs 60,000
(Being the forfeited amount recorded)
To Share Capital A/c Rs 50,000
To Share Premium A/c Rs 10,000
(Being the face value and premium of forfeited shares transferred back to the respective accounts)
3. Record the share capital and premium on the forfeited shares:
Share Capital A/c Dr. Rs 50,000
(Being the face value of forfeited shares transferred back to the share capital account)
Share Premium A/c Dr. Rs 10,000
(Being the premium of forfeited shares transferred back to the share premium account)
To Calls-in-Advance A/c Rs 60,000
(Being the amount of calls in advance adjusted against the forfeited shares)
Explanation:
- The first entry records the forfeiture of shares by debiting the Forfeiture of Shares account with the forfeited amount of Rs 60,000.
- The second entry transfers the face value of the forfeited shares of Rs 50,000 back to the Share Capital account and the premium of Rs 10,000 back to the Share Premium account.
- The third entry adjusts the amount of calls in advance of Rs 60,000 against the forfeited shares.
By recording these entries, the company accounts for the forfeiture of shares and adjusts the share capital and premium accordingly.
Attention Commerce Students!
To make sure you are not studying endlessly, EduRev has designed Commerce study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Commerce.
|
Explore Courses for Commerce exam
|
|
Similar Commerce Doubts
Top Courses for CommerceView all
Application Were received for 80000 share@ 10 each at a premium of Rs 2 per share payable on allotment payment to be made as follow: Rs 2 on application, Rs 6 on allot and Balance amount o first and final call. All call money dully received except on 5000 share which Were forfeited. Pass journal entry for forfeited ?
Question Description
Application Were received for 80000 share@ 10 each at a premium of Rs 2 per share payable on allotment payment to be made as follow: Rs 2 on application, Rs 6 on allot and Balance amount o first and final call. All call money dully received except on 5000 share which Were forfeited. Pass journal entry for forfeited ? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Application Were received for 80000 share@ 10 each at a premium of Rs 2 per share payable on allotment payment to be made as follow: Rs 2 on application, Rs 6 on allot and Balance amount o first and final call. All call money dully received except on 5000 share which Were forfeited. Pass journal entry for forfeited ? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Application Were received for 80000 share@ 10 each at a premium of Rs 2 per share payable on allotment payment to be made as follow: Rs 2 on application, Rs 6 on allot and Balance amount o first and final call. All call money dully received except on 5000 share which Were forfeited. Pass journal entry for forfeited ?.
Application Were received for 80000 share@ 10 each at a premium of Rs 2 per share payable on allotment payment to be made as follow: Rs 2 on application, Rs 6 on allot and Balance amount o first and final call. All call money dully received except on 5000 share which Were forfeited. Pass journal entry for forfeited ? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Application Were received for 80000 share@ 10 each at a premium of Rs 2 per share payable on allotment payment to be made as follow: Rs 2 on application, Rs 6 on allot and Balance amount o first and final call. All call money dully received except on 5000 share which Were forfeited. Pass journal entry for forfeited ? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Application Were received for 80000 share@ 10 each at a premium of Rs 2 per share payable on allotment payment to be made as follow: Rs 2 on application, Rs 6 on allot and Balance amount o first and final call. All call money dully received except on 5000 share which Were forfeited. Pass journal entry for forfeited ?.
Solutions for Application Were received for 80000 share@ 10 each at a premium of Rs 2 per share payable on allotment payment to be made as follow: Rs 2 on application, Rs 6 on allot and Balance amount o first and final call. All call money dully received except on 5000 share which Were forfeited. Pass journal entry for forfeited ? in English & in Hindi are available as part of our courses for Commerce.
Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.
Here you can find the meaning of Application Were received for 80000 share@ 10 each at a premium of Rs 2 per share payable on allotment payment to be made as follow: Rs 2 on application, Rs 6 on allot and Balance amount o first and final call. All call money dully received except on 5000 share which Were forfeited. Pass journal entry for forfeited ? defined & explained in the simplest way possible. Besides giving the explanation of
Application Were received for 80000 share@ 10 each at a premium of Rs 2 per share payable on allotment payment to be made as follow: Rs 2 on application, Rs 6 on allot and Balance amount o first and final call. All call money dully received except on 5000 share which Were forfeited. Pass journal entry for forfeited ?, a detailed solution for Application Were received for 80000 share@ 10 each at a premium of Rs 2 per share payable on allotment payment to be made as follow: Rs 2 on application, Rs 6 on allot and Balance amount o first and final call. All call money dully received except on 5000 share which Were forfeited. Pass journal entry for forfeited ? has been provided alongside types of Application Were received for 80000 share@ 10 each at a premium of Rs 2 per share payable on allotment payment to be made as follow: Rs 2 on application, Rs 6 on allot and Balance amount o first and final call. All call money dully received except on 5000 share which Were forfeited. Pass journal entry for forfeited ? theory, EduRev gives you an
ample number of questions to practice Application Were received for 80000 share@ 10 each at a premium of Rs 2 per share payable on allotment payment to be made as follow: Rs 2 on application, Rs 6 on allot and Balance amount o first and final call. All call money dully received except on 5000 share which Were forfeited. Pass journal entry for forfeited ? tests, examples and also practice Commerce tests.
|
|
Explore Courses for Commerce exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup