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M.430 An Aid to Accountancy—CBSE XII

Equity Share Capital A/c ...Dr. 50,000
Securities Premium Reserve A/c ...Dr. 92,000
To Forfeited Shares A/c (` 6,000 + ` 10,000) 16,000
To Equity Shares Allotment A/c 36,000
To Equity Shares First and Final Call A/c 90,000
Or
Equity Share Capital A/c ...Dr. 50,000
Securities Premium Reserve A/c ...Dr. 92,000
To Forfeited Shares A/c 16,000
To Calls-in-Arrears A/c 1,26,000
(Being 5,000 shares forfeited for non-payment of allotment
and first and final call on 3,000 shares and 2,000 shares respectively)
Bank A/c ...Dr. 68,000
To Equity Share Capital A/c 40,000
To Securities Premium Reserve A/c 28,000
(Being 4,000 forfeited shares reissued @ ` 17 per share as fully paid-up)
Forfeited Shares A/c ...Dr. 14,000
To Capital Reserve A/c (WN) 14,000
(Being the gain on reissue of 4,000 forfeited shares transferred to Capital Reserve)

Working Note:

Calculation of Gain on reissue to be transferred to Capital Reserve:
`
Ê 2,000 ˆ
Amount forfeited on Shiva’s 2,000 Shares ` 6,000 ¥ 3,000 ˜ ¯ 4,000
Á
Ë
Amount forfeited on 2,000 shares of Girdhar 10,000
Gain on reissue transferred to Capital Reserve 14,000

Or
In the Books of IPC Ltd.
JOURNAL
Date Particulars L.F. Dr. (`) Cr. (`)
Bank A/c ...Dr. 3,20,000
To Equity Shares Application A/c 3,20,000
(Being the shares application money @ ` 4 each received on 80,000 shares)
Equity Shares Application A/c ...Dr. 3,20,000
To Equity Share Capital A/c (70,000 × ` 4) 2,80,000
To Equity Shares Allotment A/c (5,000 × ` 4) 20,000
To Bank A/c (5,000 × ` 4) 20,000
(Being the application money adjusted on allotted shares)

Equity Shares Allotment A/c (70,000 × ` 4) ...Dr. 2,80,000
To Equity Share Capital A/c 2,80,000
(Being the allotment money due on 70,000 shares)