Page No 8.120:
Question 48:
Sunshine Ltd. issued 20,000 shares of ₹100 each payable ₹25 per share on application, ₹25 per share on allotment and the balance in two calls of ₹25 each. The company did not make the final call of ₹25 per share. All the money was duly received with the exception of the amount due on the first call on 400 shares held by Mr. Modi. The Board of Directors forfeited these shares and subsequently reissued them @ ₹75 per share paid-up for a sum of ₹28,000.
Journalise the above transactions and prepare Share Capital Account.
ANSWER:
Issued and applied capital 20,000 shares of ₹100 each Payable as:
Capital Reserve = Balance in Share Forfeiture Account after re-issue = ₹18,000
Question 49:
The Hindustan Manufacturing Ltd. had a total subscribed capital of ₹10,00,000 in Equity Shares of ₹10 each of which ₹7.50 were called-up. A final call of ₹2.50 was made and all amount paid except two calls of ₹2.50 each in respect of 100 shares held by D. These shares were forfeited and reissued at ₹8 per share.
Pass necessary journal entries (including that of cash) to record the transactions of final call, forfeiture of shares and reissue of forfeited shares. Also, prepare the Balance Sheet of the company.
ANSWER:
As per the Schedule III of Companies Act, 2013, the Company's Balance Sheet is presented as follows.
NOTES TO ACCOUNTS
Capital Reserve = Balance in Share Forfeiture Account after re-issue = Rs 300
Question 50:
On 1st May,2014, Directors of a Limited Company forfeited 200 shares of ₹20 each , ₹15 per share called-up, on which ₹10 per share has been paid by A , the amount of the first call of ₹5 per share being unpaid . Ten days Later, the Directors reissued the forfeited shares to B credited as ₹15 per share paid-up, for a payment of ₹10 per share.
Give journal entries in the company's books to record the forfeited shares and their reissue.
ANSWER:
Capital Reserve = Balance in Share Forfeiture Account after re-issue = Rs 1,000
Page No 8.121:
Question 51:
X Ltd . forfeited 100 shares of ₹10 each (₹8 called-up) issued at a premium of ₹2 per share to Mr. R, on which he had paid applications money of ₹5 per share, for non-payment of allotment money of ₹5 per share (including premium). Out of these, 70 shares were reissued to Mr . Sanjay as ₹8 called-up for ₹7 per share. Give necessary journal entries relating to forfeiture and reissue of shares.
ANSWER:
Capital Reserve = Balance in Share Forfeiture Account of re-issued shares × No. of shares re-issued = 70 × 4 = Rs 280
Question 52:
Bee Ltd. Company forfeited 100 Equity Shares of the face value of ₹10 each, ₹6 per share called-up, for non-payment of first call of ₹2 per share. The forfeited shares were subsequently reissued as fully paid-up @ ₹7 each.
Give necessary entries in the company's Journal.
ANSWER:
Capital Reserve = Balance in Share Forfeiture of re-issued shares = ₹100
Question 53:
Give necessary journal entries:
(i) The Directors of Devendra Ltd. resolved on 1st January, 2010 that Equity Shares of ₹10 each, ₹8 paid-up be forfeited for non-payment of final call of ₹2. On 1st February, 60 of these shares were reissued @ ₹7 per share as fully paid-up.
(ii) Virender Limited forfeited 20 shares of ₹100 each(₹60 called-up) issued at par to Mukesh on which he had paid ₹20 per share. Out of these, 15 shares were reissued to Sanjeev as ₹60 paid-up for ₹45 per share.
ANSWER:
General Reserve = Balance in Share Forfeiture after re-issue (per share) × No. of shares reissued = Rs 5 × 60 = Rs 300
Capital Reserve = Balance in Share Forfeiture after re-issue (per share) × No. of shares reissued = Rs 5 × 15 Shares = Rs 75
Question 54:
Show the forfeiture and reissue entries under each of the following cases:
(i) X Ltd. forfeited 300 shares of ₹10 each, ₹8 called-up held by Mr. A for non-payment of second call money of ₹3 per share. These shares were reissued to Mr. Z for ₹10 per share as fully paid-up.
(ii) Y Ltd. forfeited 400 shares of ₹10 each, fully called-up, held by Mr. B for non-payment of final call money of ₹4 per share. These shares were reissued to Mr. T at ₹12 per share as fully paid-up.
(iii) Light Ltd. forfeited 250 shares of ₹10 each, fully called-up held by Mr. C for non-payment of allotment money of ₹3 per share and first and final call money of ₹4 per share. These shares were reissued @ ₹8 per share as fully paid-up to Mr. P.
ANSWER:
Capital Reserve = Balance in Share Forfeiture of re-issued shares = ₹1,500
Capital Reserve = Balance in Share Forfeiture of re-issued shares = ₹2,400
Capital Reserve = Balance in Share Forfeiture of re-issued shares = ₹250
Question 55:
Record the journal entries for forfeiture and reissue of shares in the following cases:
(i) Basak Ltd. forfeited 20 shares of ₹10 each, ₹7 called-up on which the shareholder had paid application and allotment money of ₹5 per share. Out of these, 15 shares were reissued to Naresh as ₹7 per share paid-up for ₹8 per share.
(ii) Y Ltd. forfeited 90 shares of ₹10 each, ₹8 called-up issued at a premium of ₹2 per share to 'R' for non-payment of allotment money of ₹5 per share (including premium). Out of these, 80 shares were reissued to Sanjay as ₹8 called-up for ₹10 per share.
ANSWER:
Question 56:
Star Ltd. forfeited 500 Equity Shares of ₹100 each for non-payment of first call of ₹30 per share . The final call of ₹10 per share was not yet made. Out of these, 60% shares were reissued for ₹39,000 fully paid. journalise the forfeiture and reissue of shares.
ANSWER:
Question 57:
A holds 100 shares of ₹10 each on which he has paid ₹1 per share on application.
B holds 200 shares of ₹10 each on which he has paid ₹1 and ₹2 per share on application and allotment respectively.
C holds 300 shares of ₹10 each and has paid ₹1 on application, ₹2 on allotment and ₹3 on first call. They all fail to pay their arrears and the second call of ₹2 per share . Shares are forfeited and subsequently reissued @ ₹11 per share as fully paid-up.
journalise the above.
ANSWER:
Calculation of Capital Reserve
Total Share Forfeiture (at the time of cancellation of shares) = Rs 2,500 Cr.
Less: Total Share Forfeiture (at the time of re-issue of shares) = (NIL) Dr.
Capital Reserve =Rs 2,500
Question 58:
Software Ltd. company with registered capital of ₹5,00,000 in shares of ₹10 each issued 20,000 of such shares payable ₹2 on application, ₹4 on allotment, ₹2 on first call ₹2 on final call. All the money payable on allotment was duly received but on the first call being made, one shareholder paid the entire balance on his holding of 300 shares and five shareholders with a total holding of 1,000 shares failed to pay their dues on the first call. These shares were forfeited for non-payment of first call money. Final call was made and all the money due was received. Later on, forfeited shares were reissued @ ₹6 per share as fully paid-up.
Record the above in the company's Journal and prepare the Balance Sheet.
ANSWER:
Amount payable as
As per the Schedule III of Companies Act, 2013, the Company's Balance Sheet is presented as follows.
NOTES TO ACCOUNTS
Capital Reserve = Balance in Share Forfeiture Account of re-issued shares = Rs 2,000
Page No 8.122:
Question 59:
New Company Ltd. has a nominal capital of ₹2,50,000 in shares of ₹10. Of these, 4,000 shares were issued as fully paid in payment of building purchased, 8,000 shares were subscribed by the public and during the first year ₹5 per share were called-up, payable ₹2 on application, ₹1 on allotment, ₹1 on first call and ₹1 on second call. The amounts received in respect of these shares were:
On 6,000 shares Full amount called,
On 1,250 shares ₹4 per share,
On 500 shares ₹3 per share,
On 250 shares ₹2 per share.
The Directors forfeited the 750 shares on which less than ₹4 had been paid. The shares were subsequently reissued at ₹3 per share.
Pass journal entries recording the above transactions and prepare the company's Balance Sheet.
ANSWER:
Authorised Capital 25,000 shares of Rs 10 each
Issued Capital:
4,000 shares to the vendor of building
8,000 shares issued to public
Share Issued to public payable as:
Shares to be forfeited (on which paid less then Rs 4) are as:
As per the Schedule III of Companies Act, 2013, the Company's Balance Sheet is presented as follows.
NOTES TO ACCOUNTS
Working Notes:
1.
2. Calculation of amount of share forfeiture credited on shares re-issued shares
Calculation of Capital Reserve
Total Share Forfeiture (on 750 shares) = Rs 2,000 credit
Less: Share Forfeiture (750 shares × Rs 2 per share) = Rs (1,500) debit
Capital Reserve = Rs 500
Question 60:
Slow & Steady Ltd. invited applications for 10,000 Equity Shares of ₹10 each for public subscription. The amount of these shares was payable as:
On application ₹1 per share, on allotment ₹2 per share, on first call ₹3 per share and on second and final call ₹4 per share.
All sums payable on application, allotment and calls were duly received with the following exceptions:
(i) A, who held 200 shares, failed to pay the money on allotments and calls.
(ii) B, to whom 150 shares were allotted, failed to pay the money on first call and final call
(iii) C, who held 50 shares, did not pay the amount of second and final call.
The shares of A, B and C were forfeited and were subsequently reissued for cash as fully paid-up at a discount of 5%.
Pass necessary Journal entries to record these transactions in the books of X Ltd.
ANSWER:
Issued and Applied 10,000 Shares of ₹10 each
Shares to be forfeited (on which paid less then Rs 4) are as:
As per the Schedule III of Companies Act, 2013, the Company's Balance Sheet is presented as follows.
NOTES TO ACCOUNTS
Working Notes:
1.
2. Calculation of amount of share forfeiture credited on shares re-issued shares
Calculation of Capital Reserve
Total Share Forfeiture (on 750 shares) = Rs 2,000 credit
Less: Share Forfeiture (750 shares × Rs 2 per share) = Rs (1,500) debit
Capital Reserve = Rs 500
Question 61:
A share of ₹100 issued at a premium of ₹10 on which ₹80 (including premium) was called and ₹60 (including premium) was paid, has been forfeited. This share was afterwards reissued as fully paid-up for ₹70. Give Journal entries to record the above.
ANSWER:
Question 62:
Pass journal entries in the following cases:
M Ltd forfeited 200 Equity Shares of ₹10 each , issued at a premium of ₹5 per share , held by Ram for non-payment of the final call of ₹3 per share. Of these, 100 shares were reissued to Vishu at a discount of ₹4 per share.
ANSWER:
Capital Reserve = Balance in Share Forfeiture after re-issue × No. of shares re-issued = Re 3 × 100 shares = Rs 300
Question 63:
VT Ltd forfeited 200 shares of ₹10 each , issued at a premium of ₹5 per share, held by Mohan for non-payment of the final call of ₹3 per share. 100 out of these shares were reissued to Narendra at a discount of ₹4 per share. Journalise.
ANSWER:
Capital Reserve = Balance in Share Forfeiture after re-issue (per share) × No. of shares re-issued = Re 3 × 100 = Rs 300
Question 64:
The Directors of a company forfeited 300 shares of ₹10 each issued at a premium of ₹3 per share, for the non-payment of the first call money of ₹2 per share . The final call of ₹2 per share has not been made. Half the forfeited shares were reissued at ₹1,500 as fully paid-up. Record the journal entries for the forfeiture and reissue of shares.
ANSWER:
Working Notes
Share Forfeiture of Re-issued Shares
Capital Reserve = Balance in Share Forfeiture after reissue (per share) × Number of Shares Reissued = Rs 6 × 150 = Rs 900
Page No 8.123:
Question 65:
JCV Ltd., forfeited 200 shares of ₹10 each issued at a premium of ₹2 per share for the non-payment of allotment money of ₹3 per share (including premium). The first and final call of ₹4 per share has not been made as yet . 50% of the forfeited shares were reissued at ₹8 per share as fully paid-up . Pass necessary Journal entries for the forfeiture and reissue of shares.
ANSWER:
Called-up = Application + Allotment = Rs 5 + 3 (including premium Rs 2)
Working Note
Share Forfeiture of Re-issued Shares
47 videos|178 docs|56 tests
|
1. What is share capital? |
2. How is share capital recorded in accounting? |
3. What is authorized share capital? |
4. How is issued share capital different from authorized share capital? |
5. Can a company change its share capital after incorporation? |
|
Explore Courses for Commerce exam
|