Mr. A, a shareholder holding 1000 shares of Rs.10,
each did not pay the allotment of Rs.4 (including
premium Rs.1) and the first and a final call of Rs.3.
His share were forfeited after the first and final call
Pass the Journal Entry to give effect to the forfeit.
Answers
Answer:
premium are forfeited, we first find out the amount by which share capital A/c has been credited in respect of such forfeited shares and debit the share capital with such amount.
In this case, the share capital A/ c must have been credited by 800 x 10 =8,000 as the shares are forfeited after the first and final call, which means that the entry for making due the amount to be received was passed by the whole amount (i.e. the share capital A/c had been credited with the amount due at the time of application + allotment + first and final call). Similarly, the share premium A/c will be debited by the amount it was credited earlier, 800 x 2 =1,600. And, share allotment A/c will be credited by the amount it was debited earlier with respect to allotment including premium (800 x 4 = 3,200) and first and final call (800 x 3 = 2,400) and share forfeiture A/c will be credited with the amount of share application money (800 x 5 = 4,000).
Therefore, the entry will be:
Share Capital A/c 8,000
Securities Premium A/c 1,600
To Share Allotment A/c 3,200
To Share First call A/c 2,400
To Share Forfeiture A/c 4,000
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SIMILAR QUESTIONS
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A Ltd. forfeited 50 shares of Rs 100 each issued at 10% premium on which allotment money of Rs 30 per share (including premium) and first call of Rs 30 per share were not received, the second & final call of Rs 20 per share was not yet called. If 20 of these shares were re-issued as Rs 80 paid-up for Rs 90 per share, the Profit on re-issue is ____________.
Medium
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C Ltd. forfeited 50 shares of Rs 100 each issued at 10% premium on which allotment money of Rs 30 per share (including premium) and first call of Rs 30 per share were not received, the second & final call of Rs 20 per share was not yet called. If 20 of these shares were re-issued as Rs 80 paid-up for Rs 70 per share, the Profit on re-issue is __________.
Medium
View solution
>
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