Accountancy, asked by mehakmehak2800, 1 month ago

max Ltd. forfeited 500 share of rs. 100 each for non payment of first call of rs. 25 per share. 250 of these shares were re issued at rs. 50 per share fully paid up​

Answers

Answered by palak828069
8

i hope it's helpful for you

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Answered by shilpa85475
1

Assumptions:

The Paid-up value of the forfeited share is not specified in the question,  

We assume that the paid-up value is Rs. 75 per share  

We assume that the first call is also the final call, so the unpaid value is Rs.25 per share

Journal Entries

Share Capital a/c Dr. (500 x 100)  50,000  

To Forfeiture A/c Rs. (500 x 75)     37,500

To Calls in Arrears A/c (500 x 25)     12,500  

(Being share capital reduced and forfeiture of 500 shares due to non-payment of the first call)

In the above entry, the amount received on forfeited shares are booked under forfeiture a/c  

Journal entry for re-issue of 250 shares :

Bank a/c Dr. (250 x 50)   12,500

Forfeiture a/c Dr. (250 x 50)   12,500    

To Share Capital A/c (250 x 100)     25,000

(Being 250 shares re-issued @ 50 per share and money received and loss on forfeiture adjusted to share capital account)  

Forfeiture A/c Dr. (250 x  25)   6,250

To Capital Reserve A/c (250 x  25)    6,250

(Being excess amount received on 250 shares adjusted to capital reserve)

Note:

Called up value of 250 Shares @ 75 per share = 18,750

The Company’s loss on this forfeiture is 25 per share

Value of 250 shares re-issued @ 50 per share = 12,500

Adjustment of forfeiture loss @ 25 per share = 6,250

Excess received for 250 shares @ 25 per share = 6,250

So this amount of 6,250 will be transferred to Capital Reserve A/c

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