Veena Ltd. forfeited 300 equity shares of ₹ 100 each ₹ 80 per share (including premium) being called up, which were issued at a premium of 10%. Shareholder of 300 shares had paid only ₹ 50 per share (including premium).

CS Executive · Company Accounts & Auditing Practices · PYQS · December 2021
Veena Ltd. forfeited 300 equity shares of ₹ 100 each ₹ 80 per share (including premium) being called up, which were issued at a premium of 10%. Shareholder of 300 shares had paid only ₹ 50 per share (including premium). Out of these forfeited shares 200 shares were subsequently re-issued by the company at ₹ 80 called-up for ₹ 50 per share. Give necessary Journal Entries with regard to forfeiture and re-issue of shares.

Answer & Explanation:

Particulars Dr. (₹) Cr. (₹) Equity Share Capital A/c Dr. 21,000 To Calls in arrears A/c 9,000 To Share forfeited A/c 12,000 (Forfeiture of 300 shares for non-payment of call of ₹30) Bank A/c Dr. 10,000 Share forfeited A/c Dr. 6,000 To Equity Share capital A/c 16,000 (200 forfeited shares are re-issued at ₹80 called up for ₹50) Share forfeited A/c Dr. 2,000 To Capital Reserve A/c 2,000 (Amount transferred)

Topics: Share Capital

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