Page 17 - DEBK12

Chapter 8 . Company Accounts—Accounting for Share Capital 8.7

Bank A/c ...Dr. 28,890
To Shares Second and Final Call A/c 28,890
(Second and final call received on 1,926 shares)
Share Capital A/c (76 × ` 50) ...Dr. 3,800
To Forfeited Shares A/c 1,270
To Shares Allotment A/c 400
To Shares First Call A/c 1,020
To Shares Second and Final Call A/c 1,110
(76 shares forfeited as per Board’s Resolution dated...)

Note: STATEMENT SHOWING AMOUNT RECEIVED AND
CALLS-IN-ARREARS ON FORFEITED SHARES
Name of Shares Application Shares Allotment Shares First Call Shares Second and
Allottee ` 10 ` 10 ` 15 Final Call ` 15
Due Received Arrears Due Received Arrears Due Received Arrears Due Received Arrears
` ` ` ` ` ` ` ` ` ` ` `

A—30 Shares 300 300 NIL 300 NIL 300 450 NIL 450 450 NIL 450
B—20 Shares 200 200 NIL 200 100 100 300 NIL 300 300 NIL 300
C—18 Shares 180 180 NIL 180 180 NIL 270 NIL 270 270 NIL 270
D—5 Shares 50 50 NIL 50 50 NIL 75 75 NIL 75 NIL 75
E—3 Shares 30 30 NIL 30 30 NIL 45 45 NIL 45 30 15
760 760 NIL 760 360 400 1,140 120 1,020 1,140 30 1,110

Amount received on 76 forfeited shares = ` 760 (on application) + ` 360 (on allotment)
+ ` 120 (on first call) + ` 30 (on second and final call)
= ` 1,270.
No. of forfeited shares = 30(A) + 20(B) + 18(C) + 5(D) + 3(E) = 76 shares.

Illustration 2 (Comprehensive Illustration).

H Limited issued a prospectus inviting applications for 20,000 shares of ` 10 each at a premium of
` 2 per share payable as follows:

On application ` 2; on allotment ` 5 (including premium); on first call ` 3; on second and final
call ` 2.

Applications were received for 30,000 shares and pro rata allotment was made on the
applications for 24,000 shares. Money overpaid on applications was adjusted against amount
due on allotment.

Ramesh, to whom 400 shares were allotted, failed to pay the allotment money and on his
subsequent failure to pay first call his shares were forfeited. Mohan, the holder of 600 shares,
failed to pay two calls and his shares were forfeited after the second call.

Of the shares forfeited, 800 shares were sold to Krishna credited as fully paid for ` 9 per share,
the whole of Ramesh’s shares being included.

Pass Journal entries and prepare the Balance Sheet.