Question

Record the journal entries for forfeiture and reissue of shares in the following cases:
(i) X Ltd. forfeited 20 shares of ₹ 10 each, ₹ 7 called-up on which the shareholder had paid application and allotment money of ₹ 5 per share. Out of these, 15 shares were reissued to Naresh as ₹ 7 per share paid-up for ₹ 8 per share.
(ii) Y Ltd. forfeited 90 shares of ₹ 10 each, ₹ 8 called-up issued at a premium of ₹ 2 per share to R for non-payment of allotment money of ₹ 5 per share (including premium). Out of these, 80 shares were reissued to Sanjay as ₹ 8 called-up for ₹ 10 per share.

Answer 1

THE ANSWER TO THIS QUESTION IS

But he was allotted only 2500 shares on pro rata basis. After having paid Rs. 3 per share on application, he did not pay allotment money of Rs. 4.50 p

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Answer 2

1. Profit on forfeiture of 20 shares = 100

profit on forfeiture shares (15 shares) = 100/20 * 15 = 75

capital reserve = Share forfeiture cr - Share forfeiture dr

capital reserve = Rs 75 - Nil = 75

2. Profit on forfeiture of 90 shares = 450

profit on forfeiture shares (80 shares) = 450/90 * 80 = 400

capital reserve = Share forfeiture cr - Share forfeiture dr

capital reserve = Rs 400 - Nil = 400