A limited company forfeited 200 shares of 100 each (originally issued at
20% premium which was payable along with application money) on
which allotment money of '40 and first call money of 30 were not
received, the final call money of 20 is not yet called. These shares were
originally allotted on pro-rata basis in the ratio of 5: 4. These shares
were subsequently reissued at a discount of 10 per share credited as
80 paid up.
Pass necessary Journal entries for forfeiture and reissue of shares.
if u ans correctly I'll mark u as brainliest
Answers
200 shares of 100 + 20% on application
Application = 10 + 20
Allotment = 40
First Call = 30
Second & Final Call = 20 Not made
Pro-rata ratio = 5:4
So Applied Shares = 200 x 5/4
=250
Reissue = Rs. 70, 80 paid up
Total received on application = 250 x (10 + 20) = 2500 + 5000 = 7500
Application Value of allotted shares = Allotted Shares x (Application value + premium value)
= 200 x (10+20) = 2000 + 4000 = 6000
Adjusted to Allotment A/c = Total received – Application value of allotted shares
= 7500 – 6000 = 1500
Forfeiture Amount = Total money received – Premium on allotted shares
= 7,500 - 4000
=3,500
Or Actual Application value on applied shares + premium value on excess over allotted shares
= (250 x 10) + (50 x 20)
= 3500
Balance due on Allotment = (Allotted Shares x Allotment value) - Adjusted to Allotment A/c
(200 x 40) – 1500 = 6,500
Balance due on call = Allotted Shares x Call Value
= 200 x 30
= 6000
Share Capital A/c Dr. (200 x 80) 16,000
To Share Forfeiture A/c (2500+ 1000) 3,500
To Calls in Arrears A/c (6,500 + 6000) 12,500
(Forfeiture of 200 Shares due to non-payment of Allotment and Call money)
Bank A/c Dr. (200 x 70) 14,000
Share Forfeiture A/c Dr. (200 x 10) 2,000
To Share Capital A/c 16,000
(Being shares reissued at Rs. 70 credited as Rs.80 paid-up)
Share Forfeiture A/c Dr. 1,500
To Capital Reserve A/c 1,500
(Being excess in forfeiture a/c transferred to Capital Reserve A/c)