Question

Tara Ltd. Was formed with an authorised capital of Rs.40,00,000 divided into 4,00,000 shares of Rs.10 each.

The company issued 1,00,000 shares at par. The issue price was payable as follows:

On Application – Rs.3 per share

On Allotment – Rs.5 Per share

On Final Call – Rs.2 per share

The issue was fully subscribed and the company allotted shares to all the application. All money was received

except the final call money on 6,000 shares out of this 2,000 share being forfeited and out of 2,000 shares 800

Shares were reissued @ Rs 11 per share as fully paid up.

Show the ‘Share Capital’ in the Balance Sheet of Company as per Schedule III, Part I of the Companies Act,

2013​

Answer 1

JOURNAL ENTRIES IN THE BOOKS OF TARA LTD.

Explanation:

NOTE:

1) On 6,000 Shares final call wasn't paid. Therefore:

    Call-in-Arrear A/c = 12,000.

2) 2,000 Shares were Forfeited. Therefore:

     Share Forfeiture A/c = 2,000 X 8 per share = 16,000

3) Transferred to Capital Reserve A/c:

     On 800 Shares, Share Forfeiture A/c = 6,400

REFER TO THE IMAGE FOR THE ANSWER.