Q. 28. Fast Food Ltd.

issued a prospectu s offering 10,000 equity shares of ~50

each at par payable as follows : ·
~
On Application 15
On Allotment 10
 On First.Call • .15
~
... On Final Call \
10 :
. . ~ the .hold~r of soOequity shal'es did ~ot ~ay !h<; ammmt due on both the CalJ
The~e-~00 share~ ~ere forfeited by the ~oard ,ofD~e~tors and 300 ~fthese shares \Ve:·
subsequently re-issued at ,55 per share. e
- Show
.
the
entries in the Cash Book and Journal of the Company.
. '
I

[Ans. Cash at bank ,s,04,000; Capital Reserve f7,500.] v ? _: .

• ..., • " ' : \ :• J <t- '.o.... - ;;~ : _,. \ •.- -:- • I
.... 1 - • ,"! ' •• - ;. • • ••

. . Q. 29. ZL.td. was registered with an authorised capital on 10,op,ooo divided into
10,00~.:~~~s ~( ~-~ oo·~ach..'.fhe Co~p~y. ?(~ered 5,000 of these shares to the public,
whic~ wer~ ~ayable f25_p~~ sh~e Q~ appl~~atlon, ~50 per_s~~~ ?n..~l~ot~ent and the
balance three months lat~~. ~pphca~•~~s f~r_,7, 1~~ _sp.ares were re~e•_':e,~ on _which the
directors allotted as follows : · · . ,- _,._
Applications for;4,"QOO Shares ~- •~ .l! - . Full'~- ·_·_ . ·_: .· ~--··. '
Applications for 3,000 ,Shares .- _ 1,000 · · · · - -· · · ~- "'
~ Applications f~r - 100 .Shares . : . ~ii , •--;· . . .. : - ; ·=:: :. _
( 1,85,000 was:realised_on a~count of allotment ·money (excluding -~e amount
carried from· application mC?ney) and -~1, 15,000 o~ · account.of call.·~1]ie· Directors ·
' decided to forfeit those·shares on which allotment money was overdue~ ~ 1 · ~-: --

. Show the ~ntries in the company's books. . . · . ·._-. · !{_. .- :_ ;_ .: :· ~-:·" ·

[Ans. Am~~t credited to Share Forf~i~e ·Acco~t (7-~5;00] ·; ..._~ ., ..- _
.. · . . _·. - . '. . ·, . . . . :i_ ~-: .. . . ., -. ·=-; ~-- ·. •. ,;_:-~: . -: : . ;!_:~;-. ~ '.:" < ,· '·- '; . - ~ : ~ - - - - ~ - -· - ·_ •

.· Q. 30. W ~td~issued 10,0~0 sharei'.o f ~ 100 -each. J?uring the year only f80 were
called payable as follows : · ..· · · . :\ ~1-~ ~:
_:.i '..-:: ·\.~:-= . . =- ~, .- · . . • :: . . ·
..
...
_ . OnApplication
- - -~ --- .·- -~-- . ..t25
. ~ .
·- . . . ... - ". -·i_._.·
..
·,_ ~
.
,~-<--~~.--:;~=
..__
-- .--. -~--. ·. ·: ......
- ...... -· - - .. ~ _... -: .: ~,... ;;

· On Allotment ... -- ~-··-:.. f20- .. . .-, . ~ ·-~ ·

•:>~ ,. ~ -~ -~_'-_~ -~
. , On 1st Call -< , ~ .~ . f20 .. .-. _ __ . .
' . ~- -- bri Ilnd Call ~ ., : .· ·, ·. · f 15 ·; '.:. :,_~ . . , · -~ ~ -~ · : . ·. --:: :"· ·,.,-:., " ...
' . ·Am~unts were received as follow; : - -~~ ~-. _·.; .· ---·~:·_,~ -. . . : ~~ ~. ' .-'.. ·c -_: ·.--
. ... - .. \. . . -
· On 8,000 shares the full amount called -
On 1,200 shares ?65 per share·
On · 500 shares f45 per.share - · · ·· -=---::··· > :,/:·,~ · ·.:
On 300 shares ?25 per share · f -- , • •··_ ·

The directors foi.feite_d thos~ _shar~s-_on· which· less than ~65 --p~r- sh~e were
received. Sho~ entries in the Cash Book and Journal and 'show llie Shar~'- capital in the
Balance Sheet. · ;; ·.. · · ·, ~ · · · ·
 ~164...:_ _ - - - - - - - - - - - -
Q. 36. n,~ wh o hol
- - - ~~ ~A NY_A CC O~ ~: :
ds 200 shares of , 100 eac
1s~~ ~I:_s~I\R~
h, has paid only f 25 per sh ' "
application money. . are
,· ·
B who holds 300 shares of f 100 eac as
' h, has pai d ,2s per share on application
,30 per share on allotment. · ,.. ., . anq
c who holds 400 shares of , 100 each, has paid
' share ,2s per share on applicat·
,30 per on allotment ru:id ,20 per share on firs all
t ~ .. . : ·· ~
,
They failed to pay their ar_rears and the
.
fina l cal l. Their shares ~e!e forfeited
re-issued at '?5 per share. : .·. · . . . . " ¾q
'
, · · ·
Prepare necessary journal entries.·
• '
• - ......
i ·-·

[Ans. C ital Reserve ,47,000.] .

•
·.-

Q. . Pass journal entries for the forf

• ,•.
~
• '
,, ' ; • f

ei!W'e and re-issue m the foll~~ng cas

,) A Lt~. forfeited 100 shares of ~ 1~ es :
ea~h fully· call~d~up for non-payment
first call of f 3 per share and final call of
of f 3 ~~r s~~e._:All'of these shares wer
re-issued as fully paid for f~0 per sh e
' .. .... . ..
'
~. · · -----. ·
(ii) B.Lt~. forfe~ted 400 shares of . ' ... . \
\

fl0 each fully called-u~ f~r_ non-paym ~

final call of f3 per share. 300 of the~e_ ent of

f8pershare. · sha res :we ~e re- issu ~d as full y paid for
' · :~· ·· · ·_ · , ·. ·_ . .
(ti,) c·Ltd. .forfeited 700 s~ es of
has paid application money @ f3 and
i 1o·ea~h ~i y ~ali;d-~p:~n\ yhich .holder ~e
a,1lotment' mone'y @ f2 per share. Out
· · · -o f these, 300 shares were re-issu
~ (iv) D Ltd.'forfeited 1,000 shares ~f ~;10
ed as fully paid@ per share:· . ,1 .

each fully called-~p -on which-th~ hold

· /h as paid only the application mo er
ney @ ~'3 per share. Out of these, 600
"e re re-issued at f 10.50 per share, ful shares
. . ly pai d up . . ·· ·' , . a•·. · ' .
[Ans. Amount transferred to Capital Re
serve: C~ e (i) :f40~; .Case (ii) fl,500
~ase (iii) f600; Case (iv) f 1,800.] . ;
, '· · _. '
Q. 38. Pass journal entries fo~ the forfeit
' • ~ •
ure and re-issue in the following cases:
- (a) XL td. forfeited 700 shares - ... • .., I:t ! ~ ,· ' • \...
of Ashok of f 10 each f8 called-up,
had paid f5 per share. 'o ut ofthese, ?00 on which he
as sha res were re-issued for ,9 per share
fully paid.
.
. . -~\ · :.:• ,.· . :
..- --...
~ .. ....... . .
(b) YLtd. forfeited400 shares of f 10 ' ·~ ~

each, f6 called-up, for non-payment

call of f2 per share. Out of these, 300 of first
f 5 per share; sha res we re im me diately ·re-issued at
.· . '· ·
(c) Z Ltd. forfeited 300 shares of
f 100 each on which first ~all ~i ~20
was not received, the second and fm per share
al call or' f30 per share .has riot yet bee
called. Out of these~ 200 shares we n
re re-issued as f70 ·paid-up ·for f55
share. per
. . . ·
[Ans. Capital Reserve (a) f2,000; (b) f900; (c) f7,000.] .. . _, ._
'

Q. 39.. Journalise the following :

. _
(i) A Ltd. forf~ited 1,000 shares of
f 10 each, f8 ·paid, for non-payment
call of f 2 per share. Out of these, 400
shares were re-issued as ·fully paid-UP
final of
in such a way that f2,000 were transf
erred to capital reserve; · ,
 7.165
E OF ~H AR £s_
co lv f! ~ AC CO UN TS = ISSU - ~- - - - - - - - - no - - - - - - -
d 1,000 shares of ~
- - (ii ) B Ltd. forfeite 10 eac.~ f8 called-up, for n-payment of
Allotment of f2 .5 0 pe r sh
an dh fir st ca ll of f3 pe r share. Out of these, 40 0
fa;e
shares were re-issued for per s are as f8 paid-up and f5
~h ~r es o ff 10 ea ch on which ,; has been called as f7
(ii i) C L~ - forfe~~edC:~O0 per shar e
· u . t es e, 10 0 sh ares are re-issued for f6
_ h~ een pat
paid-up. -
e; _C~ pi tal Re se rv e (ii ) f6 00 ; (ii i) f4 00 .]
pe r shar
[AflS. (i) Re-issue pr ic e f? 10,00,000 divid~d into 20
,000
d. w ith a sh ar e ca pi ta l of f
<.. Q~ iw a l ExportsthLt e sh ar es to th e public as under .. __
ea ch of fe rs
shares of f50 f 15 pe r sh ar e pa ~abie ~n - ~i{dtment; f 10
bl e on applic at io n; · ·
t1 5 per share pa ya st d f 10 pe r sh ar e pa ya bl e on second call. ·. ._: ·
ll; an
per·share payable on I ca s pa id on ly the applfoaiiori money
.
s 20 0 sh ar es ha
Shareholder 'A ' w ho hold oc ly th e ap pl ication an d all~tment
s 30 0 shares ha s pa id . . '•
Shareholder 'B ' w ho ho ld . ' , . . . .' : ~ ~ . ;: . , :_
. .. . . ,' ,
money.
ar es .ha s pa id ap pl ic at io n; allotment an d first call
s 40 0 sh ·
Shareholder 'C ' w ho ho ld .· · . ·
th e
money.
of th e ab ov e sh ar eh ol ders who ha:~e no t pa id
e shares
The co m p~ y forfeits th ar es ~t a di sc ou nt of 20 % ; ·. -~:: _ . : ·
of th ~~ e sh
arrears and re-issued 60 0 en tri es re la tin g to Banlci n"t he .po ok s of
ac tio ns in cl ud in g
Journalise the ab ov e tra ns · . , - - ,_
---~-'!'-..:_,
Paliwal Ew ar ts Ltd. ._ . 00 0; on first call fl ,9 5, 00 0
an d on
on al lo tm en t f2 ,9 7, on
[Ans. A m ou nt re ce iv ed itu re .A cc ou nt .w ill be credited by .. f2 8, 00 0
Sh ar e Fo rfe '
second call ·f I,9 1, 00 0. ar e Fo rfe itu re A cc ount f2 2, 00 0. ] _·.. · -
nc e of Sh ...
forfeiture of shares.i Ba la no t be
-
tra nsferre
•
d to Ca pital Re se rv e.
itu re Ac co un t wi ll
: Balance of Share Forfe
.
· Hint /

ed at -P re m iu m , -· . .

or fe it ur e.o f Sh ar es Is su
. F ty .shares o ff 10 ea ch at
a
n Ltd. is su ed 50,000 equi
. .
ic at io
Q. 41. A cc ou nt an cy Pu bl . . . · ·· ·_ •·., .
ya bl e as un de r : .
premium of I 0% pa re m iu m fl ); · O n Fi rs t Ca ll ·f 2; an
d On
A llo tm en t f4 (P
On Application f3 ; O n . .. . . _.. . ;
.
Final Call f 2. pa ny an d al l th e .~ o~ er 'Yere du ly
( ·: The whole of th e is su e
w as ca lle d fo r
tm en t an d ca lls 1
by
m
~
o°
e
:e
co
y.
m
0~ 150 0 .~h ar~ s: Th es e. sh ar es w er e,
received ex ce pt th e ai lo at f9 .pe r sh ar e . as fully paid. 'Pa ss th e
la te r · on re -is su ed .. . -
therefore' forfeited an d . ·:
.
.
ov e
..,

tra ns ac tio ns . . ., , . , :
, necessary jo ur na l ·en tri es
to re co rd th
,1:000.f ._ .
e ab
., : ': .
[Ans. C ap i~ R es er ve . ... ...
pe r
g 2, 00 ,0 00 sh ar es of fl 0 ea~h at f1 4
I Q. 42. X Lt d. is~ued a pr
os pe ch
:_:
ls
, ·
of
· · ·
fe rin
-·: . ;-' : : ·-,_ ·; . ·,- '· _.
share, payable as fo llo w s :
f
• l
t • , \

. .
- f4 ·.
O nA pp lic at io n _,,___
en t f6 (in cl ud in g pr em iu m f4 )
O n A llo tm ··- ~· ; ·
Fi rs t C al l f3 " ·
On _
l Ba la nc e
O n Fi na l C al nt -~ e on al lo tm en t an d
d n~ t pa y th e am ou
00 0 sh ar es , di
Dinesh, the ho ld er of 1,
 _
7 166 -
PANY~CC(?UNTS .=- _!SSUE OF SliA
-- -- -- -- -- -- -- -- -- --COM
-- -- - -- - ~
first call His ·shar~s were forfeited and 400 of these s_hares were immediately
• . . re-i -.. "
credited f9 paid for f 8.40 per sh¥C, : · · ·
. .: ssued
. · ·
·Final call was made afterwards and it was duly received
. : . .:_
Show entries in the Cash Book and th~ Jo~ al o~the co~p
a1;1y.
. [Ans. Cash at B~ _,2·7,93~760; B~~c~·ofShar~' F~r
feiture Ale f2,400; Capita\
· Reserve ~,1 360· Balance of Securities Premium Reserve
.

. . Q. 43.
,· . '. '
. Y,ik.ram\ Ltd.
''

. .. issued .5_
: ' . . .' ' . - '

0.,000 sliare·s 'o ff 10 eac_~.~ta premnu~

__A/c f7,96,000.]
. ;
. ·.. . . '-~
payable as follows : . ·' · · · .:. ..." ' ·... .- ·... ··· .,..· , . . . ~ft 1 per share
• • •
~
', · ,. .
~ ~
... • 'I. •
/!.~-
... •
~
.. • : ·' ••

f3 on Application , , _: ..._
• • \} ... -~ ~ : ! .., • • • .. :

\· .,
·.., ·.~-_ ,4 orfAllotment (inclll;ding pr~miuni) :~.:,.:: , \ ~< \__. -. ':- \ .' .. ·•;.
-: _t ,, __ f2o nis tCa ll ,--1_·_:·· ..: · . "- _.. ·;•-·- •
\ .•
.. ,.._, ·. '~_:,· •.. ···. :_·_ ., · ··
....... • . ... ~
- • ,-\'
: . Balance whe~ reqw · ..•. ·_··---~;--..
red .:, i.(... ~ ~~·i ./.'·., ··- )i ..<i -.. · . . -:.:·: t\' ..
_i ,,,__..,,
l .. ,i . , •

. .. . Applications ._were received . for .46,9~0 .s~ares and

' ~~1 of these were:accepted.
Directors did not make the fi~al call. A shareholder _holdi
ng 800 shares d~d not pay the
·amou- . . nt due ·o~ first call . The __shar es,..we~
~

. per share paid.

.
- .. . -- .e.. f~ife~ted _and
' '. .-
.
~e-i~
: .
-~~ed a! .
f7 _ per share, t8
- ' ' \

. . . .
. .. . .- , · ,. . · ··
' '

'\
. ·, ·,. ..,•
· Pass Cash Book and Journal Entries~ -. -·· :> ,_·..:; .,,::i:
• , • , . ,. .,.- ": ~ - ~ • • . -:· . ,,_; · ·
~• - ·- • . _. ·: ~· ! ':, . • ~ ( .. \ ~ . ... • ' .

[Ans. Cash -t Bank f4;18,000; Capital Reserve f 4,00 ' ·•

-. \. .: - .-
~ 0.] _. )· :~:'• -~.·, ·. ·
~
, ·.-Q. ...-~1vejournal entries for forfeiture and re-issue of shar' es.:
<&<& ....
. .. .: ~. .. . . - ., ' ' ;

.-.c- ----
a) .•¥'.Ltd. forfeite~ 500 ·share~- ~f ~100._eac~· i1f·call
ed~up, issued at 10%
, pre mi~ (to be paid at" the time of allotment) for.non-p~y
nient of a first call
· - ....of.f20 per share. Out of these, 200 shares -were
f 60 per . . share.·•___• .. '. _ • ; . ·. ·. •·' : •: •-• , •" ; >\
r~~issued as f75' paid-up for
. ., . . . . . . . . ...i·· - . .. <0 I' ,- , , I •'.· • • •• , '

·(b) X Ltd.- forfei~d 300 ·shar~s off 1·00 each,··-~7

5 ·~called-up~· issued at 10%
·_. _-premium (to be paid at.the time of allotment) for no~
-payment of allotment
: 1n:oney of f30 per share (including premiwn) and firsi
"'call of f20 per share.
'.:: Out of these, .100 shares ·were re-issued fully paid
f3,100 were transferred to capital reserve . . ' ··: . . ,., .. '. ' ·
~up in such a way that as
..: : · ·. -·
[Ans. (a) Capital Re~erye f8~000;:(b) Re-issue ~rice.f96
per share. ·.
Q. 45. Journalise the following : ·
(a) YLtd. forfeited 4qo s~e s"of f 100 each~'is~ued
.(to be· paid at the time of allotment) for non-payment
premiurii,of per share
of a first ca}l of f2Q
at'a ,s
· •· · per share. The second ·and final call ·of f 20 has riot
.yet been calkd. Out of
. _ ~ese, 100 shar~s were ~e-issued on fully paid~up for f
11 O'per share. .
(b) YLtd. forfeited 700 ·shares off 1·00 each, issued at a
_for ~on-payment_~f al,l~~ent_money of f35 per share
premium of fS share p~r
(including premiuJJl)
and first call of f20 per share. The second and finafcal
l of f20 has not yet
been called. 500 of these shares were re-issued as f80
~l,~rR> naid -:110 for t92 per