Page 337 - VIRANSH COACHING CLASSES

10 Suman Ltd. issued equity shares of ` 10 each at a Premium of ` 3 per share, Payable as
follows-
` 3 on application
` 5 on Allotment (including Premium)
` 2.50 on 1st call
` 2.50 on final call

One shareholder Mr. Ashok failed to pay Allotment money and 1st call money on 200 shares.
Directors forfeited his share after first call. While another shareholder Mr. Atul failed to pay
1st call and final call money on 100 shares and his shares were forfeited after final call. Show
Journal Entries for forfeiture of shares of Mr. Ashok & Mr, AtuI
Solution :

Date Particulars L.F. Debit ` Credit `
1. Share Capital A/c ...............................................Dr. 1,500
Share Premium A/c .............................................Dr. 600
To Share Allotment A/c 1,000
To Share First call A/c 500
To Share Forfeiture A/c 600
(Being forfeiture of 200 equity share due to non-
payment of Allotment money on first call money)
2. Share Capital A/c ................................................Dr. 1,000
To Share First Call A/c 250
To Share Final Call A/c 250
To Share Forfeiture A/c 500
(Being forfeiture of 100 equity shares due to non-
payment of first call and final call money)

Working Note No. 1 -
Shares Forfeited & Premium not collected

Share Capital = No of forfeited shares × Called up value including premium
No. of forfeited shares = 200

200 × 7.5 = 1,500
Security premium = 200 × 3 = 600 (No. of shares premium per share)

Share allotment = 200 × 5 = 1,000 (No. of share Allotment money)
1st Call = 200 × 2.5 = 500 (No. of share Call Money)
Forfeited shares = Bal. Amount
Working Note No. 2 -
Share forfeited premium is collected
Share Capital = No. of shares × called up value (including premium)
= 100 × 10 = 1,000

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