Poonam Ltd. forfeited 2,00,000 equity shares of ₹10 each issued at a premium of ₹5 per share for the non-payment of the first call of ₹2 per share. The second and final call of ₹3 per share was not yet made. The forfeited shares were reissued at a discount of ₹1 per share fully paid up. Pass necessary journal entries for the above transactions in the books of Poonam Ltd. Also prepare Share Forfeiture Account.
Show Hint
Solution and Explanation
Face Value of Share = ₹10, Premium = ₹5, Issue Price = ₹15
Calls Made = Application (₹5) + Allotment (incl. premium) (₹5 + ₹5) + First Call (₹2)
Calls Not Paid = First Call ₹2 per share
Journal Entries:
(i) Forfeiture of 2,00,000 shares for non-payment of first call:
| Particulars | Dr. (₹) | Cr. (₹) |
|---|---|---|
| Share Capital A/c (2,00,000 × 10) | $20,00,000$ | |
| To Share Forfeiture A/c (6 paid + premium) | $18,00,000$ | |
| To Share First Call A/c (2,00,000 × 2) | $4,00,000$ |
(ii) Reissue of 2,00,000 forfeited shares at ₹14:
| Particulars | Dr. (₹) | Cr. (₹) |
|---|---|---|
| Bank A/c (2,00,000 × 14) | $28,00,000$ | |
| Share Forfeiture A/c (2,00,000 × 1) | $2,00,000$ | |
| To Share Capital A/c (2,00,000 × 10) | $20,00,000$ | |
| To Securities Premium A/c (2,00,000 × 5) | $10,00,000$ |
(iii) Transfer of gain on reissue to Capital Reserve:
| Particulars | Dr. (₹) | Cr. (₹) |
|---|---|---|
| Share Forfeiture A/c | $16,00,000$ | |
| To Capital Reserve A/c | $16,00,000$ |
Top Questions on Accounting for Share Capital
- What do you mean by share capital of a company? Explain the main categories in which the share capital of a company is divided.
- UP Board XII - 2025
- Accountancy
- Accounting for Share Capital
- Altima Ltd. invited applications for 2,00,000 equity shares of ₹ 10 at a premium of ₹ 4 per share. Amount payable:
On application and allotment – ₹ 7 (incl. ₹ 1 premium)
On first and final call – Balance.
Applications received for 2,40,000 shares. 30,000 rejected. Manvi allotted 4,000 shares failed to pay first and final call. Her shares were forfeited. These were reissued at ₹ 4 per share fully paid-up.
Pass journal entries in the books of Altima Ltd.- CBSE CLASS XII - 2025
- Accountancy
- Accounting for Share Capital
PR Ltd. forfeited 10,000 equity shares of ₹10 each, issued at a premium of ₹4 per share, for non-payment of the first call of ₹3 per share. The second and final call of ₹2 per share had not yet been made.
These forfeited shares were later reissued at a discount of ₹1 per share, fully paid-up.
Pass necessary journal entries for the forfeiture and reissue of shares in the books of PR Ltd. Also prepare the Share Forfeiture Account.- CBSE CLASS XII - 2025
- Accountancy
- Accounting for Share Capital
Devi and Anupam were partners in a firm. Their fixed capitals were ₹9,00,000 and ₹6,00,000 respectively on 1st April, 2023. The partnership deed provided for the following:
(i) Interest on capital @ 12% p.a.
(ii) Interest on drawings @ 15% p.a.
On 1st May, 2023, Devi introduced additional capital of ₹1,00,000 and on 1st June, 2023, Anupam withdrew ₹2,00,000 from her capital.
Devi withdrew ₹4,000 per month for her personal use and Anupam withdrew ₹2,000 per month for her personal use.
The net divisible profit of the firm for the year ended 31st March, 2024 after allowing interest on capital and charging interest on drawings was ₹3,00,000.
Prepare Current Accounts of the partners.- CBSE CLASS XII - 2025
- Accountancy
- Accounting for Share Capital
- The following information has been obtained from the Balance Sheet of Jay Ltd. as at 31st March, 2024:
- CBSE CLASS XII - 2025
- Accountancy
- Accounting for Share Capital
Questions Asked in CBSE CLASS XII exam
- You are required to design an air-filled solenoid of inductance 0.016 H having a length 0.81 m and radius 0.02 m. The number of turns in the solenoid should be:
- CBSE CLASS XII - 2025
- Electromagnetic induction
- Your school has recently inaugurated a botanical garden in the school campus to educate children on the need to preserve species of plants and appreciate their significance in our lives. As a member of the student editorial board, write a report of the inaugural ceremony and details of the garden to be published in your school newsletter. You are Ayush of class XII A.
You may organize your report by following -
Who - What - When - Where - Why - Who- CBSE CLASS XII - 2025
- Report Writing
- 'Memo Builders' was constructing a five star hotel for a leading hotel chain. The hotel had to be given possession by next year but the construction of the hotel was running six months behind schedule. The Chief Executive Officer of 'Memo Builders' was concerned as Memo Builders was known for its quality and timely completion of projects. He asked Nitin, the senior of the Project Head for a thorough investigation. Nitin investigated and reported to the Chief Executive Officer that inspite of huge absenteeism of workers, additional workers were not called. Nitin also reported to the Chief Executive Officer that three of the ten machines being used by the workers were defective. Nitin ordered for repair of the machines and asked the Project Head to appoint additional workers with attractive wages to ensure that the deadline is met.
(a) Identify the function of management. Quoting the lines from the above para, explain the steps of the process of the function of management discussed.
(b) Also explain any two points of importance of the function of management identified in (a) above.- CBSE CLASS XII - 2025
- Controlling
A current-carrying coil is placed in an external uniform magnetic field. The coil is free to turn in the magnetic field. What is the net force acting on the coil? Obtain the orientation of the coil in stable equilibrium. Show that in this orientation the flux of the total field (field produced by the loop + external field) through the coil is maximum.
- CBSE CLASS XII - 2025
- Magnetism and matter
- How would humanity benefit if people maintained silence? (Keeping Quiet)
- CBSE CLASS XII - 2025
- Keeping quiet