Page 64 - DCOM201_ACCOUNTING_FOR_COMPANIES_I

Date

To Share Application Account
(Application money received on 1,20,000 shares @ 2
each)
Share Application Account

Dr.

2,40,000
2,40,000
To Share Capital Account

(Being transfer of application money to share capital
account)
Share Allotment Account
Dr.

6,00,000

To Share Capital Account

6,00,000
(Allotment money due on 1,20,000 shares @ 5 per share)

6,00,000

Bank Account
Dr.
To Share Allotment Account

6,00,000
(Allotment money received on 1,20,000 shares)

Share First Final Call Account
Dr.

3,60,000
Bank Account Particulars Dr. L.F. 2,40,000 2,40,000
To Share Capital Account
3,60,000
(First and final call money due on 1,20,000 shares @ 3
per share)
Bank Account Dr. 3,54,000
To Share First & Final Call Account 3,54,000
(Being receipt of first and final call money on 1,18,000
shares) Unit 3: Reissue of Forfeited Shares and Bonus Issue
Share Capital Account Dr. 20,000
To Forfeited Shares Account 14,000
To Shares First and Final Call Account 6,000
(Being forfeiture of 2,000 shares for non-payment of first Notes
& final call of 3 per share)
Bank Account Dr. 9,600
Forfeited Shares Account Dr. 2,400
To Share Capital Account 12,000
(Being reissue of 1200 shares @ 8 per shares and loss of
2 per share transferred to forfeited shares account)
Forfeited Shares Account Dr. 6,000
To Capital Reserve Account 6,000
(Profit on the reissue of 1200 shares transferred from
forfeited shares account to capital reserve account)
Bank Account Dr. 2,000 2,000
To Share Capital Account
(Being reissue of 200 shares at par)
Forfeited Shares Account Dr. 1,400 1,400
To Capital Reserve Account
(Profit on reissue of 200 shares transferred to capital
reserve)
Bank Account Dr. 6,600
To Share Capital Account 6,000
To Share Premium Account 600
(Reissue of 600 shares to Mr. Z @ 11 per share)
Forfeited Shares Account Dr. 4,200
To Capital Reserve Account 4,200
(Profit on reissue of the remaining shares transferred to
capital reserve)

Working Note:
(i) Amount forfeited on 1,200 shares 12007 = 8,400
Less: Loss on reissue of 1200
Forfeited shares 12002 2,400
Profit on reissue of 1,200 shares 6,000
(ii) Since 200 forfeited shares are reissued at par, entire forfeited amount on these shares will
be treated as capital profit i.e., 200 × 7 = 1,400.
(iii) In this case also the entire forfeited amount on 600 shares will be treated as capital profit
because these shares are reissued at premium.
Example 2: Reissue of Forfeited Shares Originally Issued at Discount
Anuj Cloth Mills Limited invited applications for 50,000 shares of 100 each at a discount of 5%
payable as follows:
On application 30 per share
On allotment 25 per share
On first and final call 45 per share
The applications received were for 45,000 shares. All of these were accepted. All moneys due
were received except the first and final call on 500 shares, which were forfeited. 250 shares were
reissued @ 90 as fully paid. Pass necessary journal entries in the books of the company.
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