Question

Q. 4. A company issued Rs. 5,000 Equity shares of Rs. 10 each at a premium of Rs. 2 payable Rs. 2 op
application Rs. Son allotment and Rs. 5 on call All money was duly received except for the following -
Ankur a holder of 200 shares paid only the application money
(5)
Bahadur a holder of 300 shares paid the application and allotment money,
All the above shares w cre forfeited by the company after the call was made and Later 400 shares
including all shares of Ankur were reissued at Rs. 9 per share.
Pass the Journal entries for forfeiting & res of shares​

Answer 1

Answer:

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.

hope it helps

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