X Ltd. forfeited 20 shares of Rs.10 each, Rs. 8 called up, on which John had paid application and allotment money of Rs. 5 per share, of these, 15 shares were reissued to Parker as fully paid up for Rs. 6 per share. What is the balance in the share Forfeiture Account after the relevant amount has been transferred to Capital Reserve Account?

Question

Question

This question was previously asked in

UGC Paper 2: Commerce July 2018

Answer 1

Solution:

Date

Particulars

Dr. (Rs)

Cr. (Rs)

a)

Share Capital a/c (20 shares x 8) Dr

To Share Forfeited a/c (20 shares x 5)

To Calls in arrears a/c (20 shares x 3)

(Being 20 shares of 10 each, Rs 8 called up forfeited for the non-payment of call)

160

100

60

b)

Bank a/c (15 shares x 6) Dr

Share Forfeiture a/c (15 shares x 4) Dr.

To Share Capital a/c (15 shares x 10)

(Being 15 shares were reissued as Rs 10 paid up for Rs. 6 per share)

90

60

150

c)

Share Forfeiture a/c Dr

To Capital reserve

(Being transfer of Profit on Reissue of 15 shares)

15

Working note:-

Profit on 20 Shares (20 x 5)	Rs. 100
Profit on 20 Shares (15 x 5)	Rs. 75
Less:- Loss on Reissue (15 x 4)	Rs. 60
Amount to be transferred to Capital Reserve	Rs. 15

Amount Left in Share Forfeiture = No. of shares not reissued x Amount paid by John Per share

Amount Left in Share Forfeiture = 5 x 5 = Rs. 25