Issue, Forfeiture and Reissue of Shares
Question 1:
Eastern Company Limited issued 40,000 shares of ₹ 10 each to the public for the subscription out of its share capital, payable as ₹ 4 on application, ₹ 3 on allotment and the balance on first and final call. Applications were received for 40,000 shares. The company made the allotment to the applicants in full. All the amounts due on allotment and first and final call were duly received.
Give the journal entries in the books of the company.
Question 2:
Jupiter Comapny Limited issued 35,000 equity shares of ₹ 10 each at a premium of ₹ 2 payable as follows:
\(\quad\) On Application ₹ 3
\(\quad\) On Allotment ₹ 5 (including premium)
Balance on First and Final Call
The issue was fully subscribed. All the money was duly received.
Record journal entries in the books of the company.
Question 3: [Call-in-Arrears]
Cronic Limited issued 10,000 equity shares of ₹ 10 each payable at ₹ 2.50 on application, ₹ 3 on allotment, ₹ 2 on first call, and the balance of ₹ 2.50 on second and final call. All the shares were fully subscribed and paid except of a shareholder having 100 shares who could not pay for second and final call.
Give journal entries to record these transactions.
Question 4:[Call-in-Advance]
Konica Limited registered with an authorised equity capital of Rs. 2,00,000 divided into 2,000 shares of ₹ 100 each, issued for subscription of 1,000 shares payable at ₹ 25 per share on application, ₹ 30 per share on allotment, ₹ 20 per share on first call and the balance as and when required.
Application money on 1,000 shares was duly received and allotment was made to them. The allotment amount was received in full, but when the first call was made, one shareholder failed to pay the amount on 100 shares held by him and another shareholder with 50 shares, paid the entire amount on his shares. The company did not make any other call.
Give the necessary journal entries in the books of the company to record these share capital transactions.
Question 5:
Rohit & Company issued 30,000 shares of ₹ 10 each payable ₹ 3 on application, ₹ 3 on allotment and ₹ 2 on first call after two months. All money due on allotment was received, but when the first call was made a shareholder having 400 shares did not pay the first call and a shareholder of 300 shares paid the money for the second and final call of ₹ 2 which had not been made as yet.
Give the necessary journal entries in the books of the company
Question 6: (Issue of shares at par, over-subscription and pro-rata allotment)
Kirloskar Ltd. issued 10,000 shares of ₹ 20 each to the public payable ₹ 8 on application, ₹ 6 on allotment and ₹ 6 on first and final call. Applications were received for 12,500 shares. The directors decided to allot 10,000 shares on pro-rata basis and surplus of application money was utilised for allotment. Pass the Journal entries assuming that the amounts due were received.
Question 7:
Yash Ltd. invited applications for 50,000 equity shares of ₹ 10 each at a premium of 10%. The amount was payable as follows:
On application ₹ 3 per share;
on allotment ₹3 per share (including premium) and on first and final call, the balance amount
Applications were received for 1,20,000 shares and shares were alloted on pro-rata basis to all applilcants. The excess money received on application was to be adjusted towards sum due on allotment. Application money in excess of sums due on allotment was refunded. A shareholder who applied for 6,000 shares could not pay the first and final call money.
Pass necessary journal entries for the above transactions in the books of Yash Ltd.
Question 8:
CCL Ltd. invited applications for issuing 75,000 equity shares of ₹ 10 each at a premium of ₹ 3 per share.
The amount was payable as follows:
On Application – ₹ 2 per share
On Allotment – ₹ 6 per share (including premium)
On First Call – ₹ 3 per share
On Second and Final Call – Balance
Applications for 1,20,000 shares were received. Application for 45,000 shares were rejected and the excess application money was refunded. Full allotment was made to remaining applicants. All moneys due were received except for Harish, a shareholder holding 2,000 shares, who failed to pay the first and second and final call money.
Pass necessary journal entries for the above transactions in the books of the company.
Forfeiture of shares
Question 9:
Alpha Ltd. issued 20,000 Equity Shares of ₹ 10 each at par payable: On Application ₹ 2 per share; on allotment ₹ 3 per share; on first call ₹ 3 per share; on second and final call ₹ 2 per share.
Ganesh was allotted 100 shares. Pass necessary Journal entry relating to the forfeiture of shares in each of the following alternative cases:
Case 1. If Ganesh failed to pay the allotment money and his shares were immediately forfeited.
Case 2. If Ganesh failed to pay allotment money and on his subsequent failure to pay the first call, his shares were forfeited.
Case 3. If Ganesh failed to pay the first call and on his subsequent failure to pay the second and final call, his shares were forfeited.
Question 10:
Chand Ltd. invited applications for issuing 1,00,000 equity shares of ₹ 10 each at a premium of ₹ 2 per share. The amount per share was payable as follows: ₹ 4 (including premium) on applicatoin, ₹ 5 on allotment and balance on first and final call. Applications were received for 1,80,000 shares of which applications for 30,000 shares were rejected and remaining applicants were allotted shares on pro rata basis. Mansi holding 5,000 shares failed to pay first and final call money and her shares were forfeited.
Pass necessary Journal entries for the above transactions in the books of the company.
Question 11:
Vikram Ltd. forfeited 5,000 shares of Rahul, who had applied for 6,000 shares for non-payment of allotment money of ₹ 5 per share and first and final call of ₹ 2 per share. Only application money of ₹ 3 was paid by him. Out of these, 3,000 shares were re-issued @ ₹ 12 per share as fully paid.
Pass entries for forfeiture and reissue of shares.
Question 12:
Ratan Ltd forfeited 3,000 shares of ₹ 10 each (issued at ₹ 2 premium) for non-payament of first call of ₹ 2 per share. Final call of ₹ 3 per share was not yet made. Out of thse, 2,000 shares were re-issued at ₹ 10 per share as fully paid. Pass entries for forfeiture and reissue of shares.
Question 13:
Vani Limited invited applications for issuing 1,00,000 equity shares of ₹ 10 each at a premium of 10%. The amounts were payable as under:
| On Application and Allotment | ₹ 4 per share (including premium ₹ 1) |
| On First Call | ₹ 4 per share |
| On Second and Final Call | ₹ 3 per share |
Applications for 1,50,000 shares were received and pro rata allotment was made to all the applicants. Excess application money was adjusted towards sums due on calls. Parth, a shareholder who had applied for 600 shares, did not pay the first call. His shares were forfeited. The second and final call was not yet made. Half of the forfeited shares were reissued at ₹ 8 per share fully paid-up.
Journalise the above transactions in the books of Vani Limited by opening calls-in-arrears and calls-in-advance account whenever necessary.
Issue, Forfeiture and Reissue of Shares
