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Only from forefeiture to capital reserve only not whole

Only from forefeiture to capital reserve only not whole _ Company Accounts—issue and Forfeiture of Shares 299 Cans-in-Advance on 800 shares of Chander = 800 x R4 = e 3,200. Total money received on Allotment: + 0.200 .57.200 Hema Ltd. invited applications for issuing 30,000 Equity shares of r IOO each at a premium Of t20 each. The amount was payable as follows: On Application and Allotment C40 (including premium 10) per share. On First Call C50 (including premium 10) per share On and Final Call — Balance Applications for 75.000 shares were received. Applications for 15,000 shares were rejected and the money received from them was refunded. Shares were allotted on pro rata to the remaining applicants. All calls were made. A who had applied for 2,000 shares failed to pay the first call and second and final call on the shares allotted to him. B who was allotted I shares failed to pay the second and final call. The shares of both A and B were forfeited. The forfeited shares were reissued at 160 fully paid. necessary journal entries in the books of the company for the above transactions. Journal Entries PÜÜcul•r• Bank Kc To Equity Share Application and Allotment NC teeing apc*cation and allotment money received 75.000 snares share "'duding premium of 10) Eq.ity Stwe Aoplicauoo and Allotment Alc To Eqaity Share Capital NC to Premium Reserve NC TO Equty First Can Atc Bar* ICBSE(F) 20111 30.00000 3000.000 9.00000 '2.00000 6,00.ooo

Dear Student
 
Journal in the books of Hema Ltd.
Date Particulars    Debit   Credit 
         
         
  Share Capital A/c (1,000 x 100) Dr.            100,000  
  Secuties Premium Reserve A/c (1,000 x 10) Dr.               10,000  
    To Calls in Arrears A/c (10,000 + (1,000 x 30) )                    40,000
    To Share Forfeiture A/c ((2,000 x 40) - (1,000 x 10) (i.e Total received less : utilised towards securities premium))                   70,000
  (Being 1,000 Shares of A forfeited for non payment of First as well as Second Call money)      
         
  Share Capital A/c (1,000 x 100) Dr.            100,000  
    To Calls in Arrears A/c (1,000 x 30)                   30,000
    To Share Forfeiture A/c (1,000 x 70)                   70,000
  (Being 1,000 Shares of B forfeited for non payment of Second Call money)      
         
  Bank A/c (2,000 x 160) Dr.            320,000  
    To Share Capital A/c (2,000 x 100)                200,000
    To Securities Premium A/c (2,000 x 60)      
  (Being shares issued @ Rs 160/- per share fully paid up)      
         
  Share Forfeiture A/c (70,000 + 70,000) Dr.            140,000  
    To Capital Reserve A/c                140,000
  (Profit on Reissue transferred to capital reserve)      

Calculation For  Call in arrears on First Call - A    
Applications Allotted  (2,000 x 30,000 / 60,000)                                         1,000
Applications Applied                                          2,000
Total money Received on Applkication  (2000 x 40)                                      80,000
Application money Utilised  (1,000 x 40)                                      40,000
Total Advance money to be utilised  (80,000 - 40,000)                                      40,000
First Call money Due (Including Securities Premium)  (1,000 x 50)                                      50,000
     
Advance Money Adjusted against First Call money (Excluding Securities Premium)                                       40,000
First Call money (Excluding Securities Premium) in arrears                                                 -  
Securities Premium in Arrears                                       10,000
Total First Call money in arrears                                       10,000

Note: For better understanding forfeiture entry for both A and B has been shown separately.


Regards

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