a ltd issued 5000 share of rs.10 each at a premium of rs.5per share.the amount was payable as rs.3 on application, rs.7 on allotment (incl.premium)and the balance on frist and final call . all shares were subscribed and money duly received.show the journal entries.
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When a shareholder doesn't pay up the called up value, his shares are forfeited and the amount is credited to forfeiture account at the time of forfeiture.
ForfeitureAmount=Applicationamount+Allotmentamount
Substitute values in the above equation
ForfeitureAmount=Rs2+Rs3=Rs5
ForfeitureAmounttobecredited=Sharesforfeited×Forfeitureamount
Substitute values in the above equation
ForfeitureAmounttobecredited=200shares×Rs5=Rs1,000.
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