You are required to pass journal entries for forfeiture and re-issue of shares in the following questions:

1. A company forfeited 900 shares of ₹10 each issued at 20% premium (to be paid at the time of allotment) for
non-payment of a final call of ₹2 per share. Out of these, 400 shares were re-issued ats fully paid-up for ₹ 12
per share.

Journal
Date Particulars Dr. Cr.
Share Capital A/c Dr. 9,000
To Calls in Arrears A/c 1,800
To Share forfeiture A/c 7,200
Bank A/c Dr. 4,800
To Share Capital A/c 4,000
To Securities Premium A/c 800
Share forfeiture A/c Dr. 3,200
To Capital Reserve A/c 3,200

2. A company forfeited 1,200 shares of ₹20 each issued at premium of ₹2 per share (₹18 called up) on which
allotment money of ₹6 (including premium) and first call of ₹4 was not paid by the shareholder. 400 of these
shares were re-issued at ₹15 per share as ₹18 paid up.

Journal
Date Particulars Dr. Cr.
Share Capital A/c Dr. 21,600
Securities Premium A/c Dr. 2,400
To Calls in Arrears A/c 12,000
To Share forfeiture A/c 12,000
Bank A/c Dr. 6,000
Share forfeiture A/c Dr. 1,200
To Share Capital A/c 7,200
Share forfeiture A/c Dr. 2,800
To Capital Reserve A/c 2,800

3. A company forfeited 450 shares of ₹10 each issued as 20% premium (to be paid at the time of allotment) for
non-payment of allotment money of ₹4 per share (including premium), first call of ₹3 per share and final call
of ₹2 per share. Out of these, 150 shares were re-issued as fully paid-up at a discount of ₹3 per share.

Journal
Date Particulars Dr. Cr.
Share Capital A/c Dr. 4,500
Securities Premium A/c Dr. 900
To Calls in Arrears A/c 4,050
To Share forfeiture A/c 1,350
Bank A/c Dr. 1,050
Share forfeiture A/c Dr. 450
To Share Capital A/c 1,500
4. A company forfeited 1,500 shares of ₹20 each issued at a premium of ₹2 per share (₹18 called up) on which
he did not pay first call of ₹4. Of these, 200 shares were reissued @ ₹16 per share as ₹18 paid up.
Journal
Date Particulars Dr. Cr.
Share Capital A/c Dr. 27,000
To Calls in Arrears A/c 6,000
To Share forfeiture A/c 21,000
Bank A/c Dr. 3,200
Share forfeiture A/c Dr. 400
To Share Capital A/c 3,600
Share forfeiture A/c Dr. 2,400
To Capital Reserve A/c 2,400

5. A company forfeited 300 shares of ₹10 each issued at 20% premium (to be paid at the time of allotment) for
non-payment of first call of ₹2 per share and final call of ₹1 per share. Out of these, 100 shares were reissued
as fully paid up for ₹10 per share.

Journal
Date Particulars Dr. Cr.
Share Capital A/c Dr. 3,000
To Calls in Arrears A/c 900
To Share forfeiture A/c 2,100
Bank A/c Dr. 1,000
To Share Capital A/c 1,000
Share forfeiture A/c Dr. 700
To Capital Reserve A/c 700

6. Pushkar Ltd. forfeited 800 shares of ₹10 each issued at premium of ₹2 per share (₹8 called up) for non-
payment of allotment money of ₹6 per share (including premium). Out of these, 300 shares were reissued as
₹8 called for ₹7 per share.
Journal
Date Particulars Dr. Cr.
Share Capital A/c Dr. 6,400
Securities Premium A/c Dr. 1,600
To Calls in Arrears A/c 4,800
To Share forfeiture A/c 3,200
Bank A/c Dr. 2,100
Share forfeiture A/c Dr. 300
To Share Capital A/c 2,400
Share forfeiture A/c Dr. 900
To Capital Reserve A/c 900

7. Kashi Ltd. forfeited 70 shares of ₹10 each issued at 20% premium (to be paid at the time of allotment) on
which first call money of ₹2 per share was not received; the final call of ₹3 is not yet called. 50 of these
shares were subsequently re-issued at ₹6 per share as ₹7 paid up.
 Journal
Date Particulars Dr. Cr.
Share Capital A/c Dr. 490
To Calls in Arrears A/c 140
To Share forfeiture A/c 350
Bank A/c Dr. 300
Share forfeiture A/c Dr. 50
To Share Capital A/c 350
Share forfeiture A/c Dr. 200
To Capital Reserve A/c 200

8. 3,400 shares of ₹10 each, issued at premium of ₹3 on which ₹10 (including premium) was called and ₹8
(including premium) was paid, have been forfeited. 1,200 of these shares were re-issued as fully paid in such
a way that ₹1,200 were transferred to capital reserve.
Journal
Date Particulars Dr. Cr.
Share Capital A/c Dr. 23,800
To Calls in Arrears A/c 6,800
To Share forfeiture A/c 17,000
Bank A/c Dr. 7,200
Share forfeiture A/c Dr. 4,800
To Share Capital A/c 12,000
Share forfeiture A/c Dr. 1,200
To Capital Reserve A/c 1,200

9. Velocity Ltd. forfeited 500 shares of ₹100 each, issued at a premium of 20% on which application money of
₹25 per share has been paid. These shares were forfeited for non-payment of allotment money of ₹40 per
share (including premium) and first call of ₹20 per share. Out of these, 300 shares were re-issued as ₹65 paid
up in such a way that ₹4,500 were transferred to capital reserve.
Journal
Date Particulars Dr. Cr.
Share Capital A/c Dr. 32,500
Securities Premium A/c Dr. 10,000
To Calls in Arrears A/c 30,000
To Share forfeiture A/c 12,500
Bank A/c Dr. 16,500
Share forfeiture A/c Dr. 3,000
To Share Capital A/c 19,500
Share forfeiture A/c Dr. 4,500
To Capital Reserve A/c 4,500

10. Kirloskar Ltd. forfeited 900 shares of ₹100 each, issued at premium of ₹30% on which application money
of ₹30 per share and allotment money of ₹40 per share (including premium) has been paid. It was forfeited
for non-payment of a first call of ₹20 per share. Out of these, 400 shares were re-issued as fully paid at the
maximum rate of discount allowed by law.
 Journal
Date Particulars Dr. Cr.
Share Capital A/c Dr. 54,000
Securities Premium A/c Dr.
To Calls in Arrears A/c 18,000
To Share forfeiture A/c 36,000
Bank A/c Dr. 24,000
Share forfeiture A/c Dr. 16,000
To Share Capital A/c 40,000
Hint: Face value of each share is ₹100. When Kirloskar Ltd. issued the shares originally, it was able to
secure only ₹40 per share (on application and allotment). Thus, when company re-issues these shares,
it will be looking to secure minimum ₹60 per share more. Hence, the maximum amount that company
can allow as discount is ₹40 per share so that it can get at least ₹60 per share. Thus, 400 shares are re-
issued at price of ₹60 per share.

11. Geetanjali Ltd. forfeited 1,600 shares of ₹10 each issued at 20% premium (to be paid at the time of allotment)
on which allotment money of ₹5 (including premium) and first call money of ₹2 was not received; the final
call of ₹1 is not yet called. 1,100 of these shares were re-issued as fully paid for ₹8 per share.
Journal
Date Particulars Dr. Cr.
Share Capital A/c Dr. 14,400
Securities Premium A/c Dr. 3,200
To Calls in Arrears A/c 11,200
To Share forfeiture A/c 6,400
Bank A/c Dr. 8,800
Share forfeiture A/c Dr. 2,200
To Share Capital A/c 11,000
Share forfeiture A/c Dr. 2,200
To Capital Reserve A/c 2,200

12. Sterling Ltd. forfeited 40 shares of ₹10 each issued at 20% premium (to be paid at the time of allotment) on
which first call money of ₹2 was not received; the final call money of ₹2 is not yet called. These shares are
subsequently re-issued at ₹7 per share as ₹8 paid up.
Journal
Date Particulars Dr. Cr.
Share Capital A/c Dr. 320
To Calls in Arrears A/c 80
To Share forfeiture A/c 240
Bank A/c Dr. 280
Share forfeiture A/c Dr. 40
To Share Capital A/c 320
Share forfeiture A/c Dr. 200
To Capital Reserve A/c 200