Question

arun holds 2000 shares of Rs.10 each in Ram Ltd. He has paid Rs.2 and Rs.3 per share on application and allotment respectively, but failed to pay Rs.3 and Rs.2 per share for first and second calls respectively directors forfeited his shares​

Answer 1

  Particulars                                                                        Amt       Amt

1) Share Capital A/c $(600 \times 8 )$                                             Dr          $4800$

     To share allotment a/c $( 100 \times 2 )$                                                  $200$

     To share first call a/c  $( 300 \times 3)$                                                  $900$

     To share second call a/c $(600 \times 2)$                                            $1200$

     To share forfeiture a/c  $(600 + 1000 + 900)$                               $2500$

( Being $600$ share @ $Rs. 10$ per share $Rs. 8$ called up

forfeited after making second call)

2) Bank  a/c                                                                              Dr         $6600$

       To sh.capital a/c                                                                             $6000$

        To securities a/c                                                                            $600$

( Being $600$ share @ $Rs. 10$ each $Rs. 11$ per share

fully paid up reissued)

                                       

3)  share forfeited a/c                                                           Dr         $2500$

        To capital reserve a/c                                                                  $2500$

(Being balance of share forfeited account

 transferred to capital reserve a/c after reissue)

Working note: -

             TOTAL MONEY CALLED-UP                         RS.

                    Application                                              $1$

                    Allotment                                                  $2$

                     First call                                                  $3$

                    Second call                                               $2$

                                                                    Total =       $8$

Amount transferred to share forfeited

application money received from Amit ($100$ share$\times 1$)

 Application and allotment money received from Bimal ($200$ share $\times 3$)

 application, allotment and first call received from chetan ($300$ share $\times 6$)

  Amount transferred to share forfeited

CALCULATION OF CAPITAL RESERVE

As share are reissued at price higher than face value hence full amount of share forfeited will be transferred to capital reserve.

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