can you please explain q 46 on pg 7.120 of book 2 of class 12 company accounts

Dear Dev, 

First entry is for forfeiture of shares(900 shares to be forfeited):
Equity share capital A/c should be debited by Rs.67,500 as 900 shares forfeited and shares are only 75 called up as no second and final call made, â€‹Share forfeiture A/c should be credited by amount paid on these shares i.e. 900x25 (only application money of Rs.25 is paid) and calls in arrears should be credited for amount(call money) unpaid i.e. 900 x[30 (Allotment)+20(First Call)]= Rs 45,000

Second entry is for re-issue of shares:
Bank A/c should be debited by Rs 81,000 [900x 90 (Reissue price)], Equity share capital A/c should be credited by called up capital i.e.Rs 67,500 and remaining amount should be credited as security premium a/c i.e. 81,000-67,500 = 13,500.

Third entry is for transfer of share forfeiture a/c balance to capital reserve i.e. share forfeiture a/c which is credited in first entry is now debited by full amount.


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