Forfeiture of Shares Problems and Solutions
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Problem 1:
Forfeited Fully Called Up Capital
A Ltd. forfeited 300 equity shares of Rs. 10 fully called-up, held by Mr. X for non-payment of Final Call @ Rs. 4 each. However, he paid Application money @ Rs. 2 per share and Allotment money @ Rs. 4 per share. These shares were originally issued at par, Given Journal entries for forfeiture.
Solution:
Problem 2:
Forfeited Partial Called Up Capital
X Ltd forfeited 200 equity shares of Rs. 10 each, Rs. 8 called-up for non-payment of first call money @ Rs. 2 each. Applications money @ Rs. 2 per share and Allotment money @ Rs. 4 per share have already been received by company. Give Journal entries for the forfeiture.
Solution:
Problem 3:
Discounted Shares Forfeited
J and G Ltd. forfeited 200 equity shares of Rs. 10 each fully called-up for non-payment of final call @ Rs. 2 per share. These shares were originally issued at a discount of 10%. Application, Allotment and First Call money per share @ Rs. 2, Rs. 3 and Rs. 2 respectively were received in time. Give Journal entries for the forfeiture.
Solution:
Problem 4:
Forfeiture and Reissue of Shares Journal Entries
Ali Ahmed & Company is Public Limited Company listed in Karachi Stock Exchange. Company formed in 2006, under Authorized Shares 100,000 of worth 100 each. Company has decided to raise equity finance by issuing 20,000 equity shares at a Premium of Rs. 20 per share payable as follows: on Application Rs. 30; on Allotment Rs. 50 (including Premium); on First Call Rs. 20 and on Final Call Rs. 20. Applications were received for 24,000 of equity shares. 4,000 Applications were refunded and were transfer the ownership to all other applicants. Mr. Khan, the holder of 1,000 shares, failed to pay First Call Money. On his subsequent failure to pay the Final Call Money, the shares were forfeited. After forfeiture, 500 shares reissued at 90 each. Show the Journal entries; Bank Book and Balance Sheet.
Requirement: Show the Journal entries; Bank account, Share Capital Account and Balance Sheet for the year ended 30th March, 2018.
Solution:
Problem 5:
Forfeiture and Reissue of Shares Journal Entries
Noor Khan Limited Company was established with Authorized Capital of 100,000 shares and invited applications for 10,000 shares of 10 each at premium of Rs. 5 per share payable as: On application Rs. 3 per share, on allotment Rs. 6 per share including premium and balance in two calls in equal amount. Applications were received for 18,000 shares. 8,000 share applications were refunded and were allotted to all the other applicants. Mr. Nadeem fail to pay the allotment money for 200 shares issued to him; so these shares were forfeited when he will fail to pay the 1st and 2nd call money. Thereafter, 100 shares were reissued at stated rate of 9 per share. All other monies were received by the Abbottabad Ltd. as on December 31st, 2017.
Solution:
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