PPT - Forfeiture and Reissue of Shares (Part - 2) CA Foundation Notes | EduRev

Fundamentals of Accounting for CA CPT

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CA Foundation : PPT - Forfeiture and Reissue of Shares (Part - 2) CA Foundation Notes | EduRev

 Page 2


Transfer to 
Capital 
Reserve 
Reissue 
Forfeiture 
Page 3


Transfer to 
Capital 
Reserve 
Reissue 
Forfeiture 
Forfeiture of Shares 
The term “Forfeit” actually means taking away of 
property on the breach of a conditions. 
 
It is very common that one or more shareholders fail 
to pay their allotment or calls on the due dates. 
 
Failure to pay the call money results in forfeiture of 
shares.  
 
Forfeiture of shares is the action taken by a company 
to cancel the shares.  
 
  
Page 4


Transfer to 
Capital 
Reserve 
Reissue 
Forfeiture 
Forfeiture of Shares 
The term “Forfeit” actually means taking away of 
property on the breach of a conditions. 
 
It is very common that one or more shareholders fail 
to pay their allotment or calls on the due dates. 
 
Failure to pay the call money results in forfeiture of 
shares.  
 
Forfeiture of shares is the action taken by a company 
to cancel the shares.  
 
  
Forfeiture of Shares 
Accounting  
Before passing the entries on forfeiture – students 
– we must collect the following information  
1. Amount Called up  
2. Amount paid up  
3. Amount Un-paid  
 
  
Page 5


Transfer to 
Capital 
Reserve 
Reissue 
Forfeiture 
Forfeiture of Shares 
The term “Forfeit” actually means taking away of 
property on the breach of a conditions. 
 
It is very common that one or more shareholders fail 
to pay their allotment or calls on the due dates. 
 
Failure to pay the call money results in forfeiture of 
shares.  
 
Forfeiture of shares is the action taken by a company 
to cancel the shares.  
 
  
Forfeiture of Shares 
Accounting  
Before passing the entries on forfeiture – students 
– we must collect the following information  
1. Amount Called up  
2. Amount paid up  
3. Amount Un-paid  
 
  
Forfeiture of Shares 
Accounting  
For eg – Mr. X holds 500 shares of  ? 10 each, fully 
called up. He did not pay first and final call of 4 per 
share. He has already paid application of ? 2 and 
allotment of ? 4 per share 
 
  
Solution 
                                500 x 10  
 
  
2          4               
10 
6  
4 
4 
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