Pass necessary journal entries of forfeiture and reissue of shares. In that case the May 04, 2021 - ICAI Notes 9.2 - Issue, Forfeiture & Reissue of Shares (Part - 4) CA Foundation Notes | EduRev is made by best teachers of CA Foundation. 8 must be collected if shares are reissued as fully paid up. 7 called-up on which the shareholder had paid application and allotment money of Rs. Amount paid up. If you are on a personal connection, like at home, you can run an anti-virus scan on your device to make sure it is not infected with malware. The directors of A Ltd. forfeited 500 shares of 50 each, 40 being called up, on which Radha, a shareholder paid application and allotment moneys of 25 per share but did not pay first call money of 15 per share. Share Capital A/c Dr. To Forfeited Shares A/c. 10 fully called-up, held by … Of these 10 each held by Ghambir. When Forfeiture of shares Issued at Par– In this situation, The share capital account of a company is debited with the amount called-up on the current date of forfeiture on shares. 2 has already been paid is forfeited and is subsequently reissued, then Rs. However, the amount receivable on reissue of such shares together with the amount already received from defaulting shareholders, shall not, in any case, be less than the original issue price of shares. Pass necessary joumal entries for forfeiture and reissue. Copyright 10. Accounting Entries on Forfeiture of Share. 100 each. The shares of C were then reissued at Rs. A forfeited share may be sold or otherwise disposed of, on such terms and in such manner as the Board thinks fit. 10 each fully called up, held by Mr. A for non-payment of allotment money of Rs. You may need to download version 2.0 now from the Chrome Web Store. Transaction: Journal Entry: Amount: 1. Vand the Journal entries for forfeiture and reissue of shares in the following cases: Ltd. forfeited 200 shares of 10 each, 7 called-up on which the shareholder had paid application and allotment money of? Therefore, the Directors forfeited their shares. 3 per share on these shares. 7 per share paid-up for Rs. Image Guidelines 5. If such shares are reissued at premium the premium received should be credited to Securities Premium A/c. These shares represent a part of the company, so the shareholder becomes a part owner. Share Capital A/c Dr. To Share Forfeited A/c. Completing the CAPTCHA proves you are a human and gives you temporary access to the web property. 35. Such shares are issued by the company. Give Journal entry relating to ‘Forfeiture of Shares’ for the following: 1.ABC Ltd. Pass necessary journal entries of forfeiture and reissue of shares. (With the discount allowed on reissue), To Share Capital A/c (With the amount called up). 5 per share. The ownership of a company is broken into units we know as shares. Reissue Of Shares 3 Understand the concept and accounting treatment of call-in-arrears and call-in-advance. Journal Entry. 9 per share fully paid up. 15 (i.e. Give journal entries for the forfeiture and reissue of forfeited shares, (a) X Co. Ltd. forfeited 100 shares of Rs. Sometimes on non-payment of call money, we see forfeiture and reissue of shares. (i) C Ltd. forfeited 1000 shares of Rs. of forfeiture. Please enable Cookies and reload the page. Journal entries for forfeiture and reissue. 2 per share. Out of these, 200 shares were re-issued to Vimal as fully paid-up for Rs. Journal entry will be. Record the Journal entries for forfeiture and reissue of shares in the following cases: i. X Ltd. forfeited 20 shares of Rs.10 each, Rs.7 called up on which the shareholder had paid application and allotment money of Rs. (b) Reissue of forfeited shares originally issued at discount: If the shares which were originally issued at a discount are forfeited and reissued, then on reissue the new allottee would get the advantage of discount, besides getting some additional discount from share forfeited account. The journal entry for the above will be as follows: Bank A/c (the amount received on reissue) Dr. Share Forfeited A/c (the amount allowed as discount)Dr. To Share Capital A/c (paid up amount) As stated earlier the amount of discount allowed on reissue of shares at the most can be equal to the forfeited amount on such shares. A company forfeited shares of Rs. To Calls-in-Arrears* Amount called up. Share forfeited a/c Dr. (with credit balance left in share forfeited account after reissue), (Being share forfeited account transferred). 5 per share. Prohibited Content 3. Make journal entries in the books of the company. Solution: Content Filtrations 6. Alternatively, the first entry can also be passed in the following method. Before publishing your articles on this site, please read the following pages: 1. (a) Reissue of forfeited Share Originally Issued at Par: When the forfeited shares are reissued at a discount, the amount of discount should not exceed the amount credited to Share Forfeited Account. Record the journal entries for forfeiture and reissue of shares in the following cases: (i) X Ltd. forfeited 20 shares of ₹ 10 each, ₹ 7 called-up on which the shareholder had paid application and allotment money of ₹ 5 per share. 10 on which Rs. The shares call account or shares allotment amount maintains arrears … Out of these, 150 shares were reissued to Mahesh as ? Plagiarism Prevention 4. When the forfeited shares are re-issued at par or at a premium, the entries are similar to the entries already passed in connection with the issue of shares at par or at premium. 4 per share. These shares can be reissued at par, premium, and discount and the entries are as follows, 1.If reissue is at Par This document is highly rated by CA Foundation students and has been viewed 1790 times. Solution Journal Entries Date Particulars L.F. Dr. Cr. To Discount on Issue of Shares A/c. the forfeiture and reissue of shares. (b) Ajay and Co. Limited purchased Land costing 27,00,000 from Akash Ltd. Ajay and Co. Ltd paid 30% of the amount by cheque and balance was paid by issue of equity shares of Rs 100 each at a premium of 20% per annum. 20 per share, and (III) Rs. Disclaimer 9. ADVERTISEMENTS: ADVERTISEMENTS: Solution: Illustration 3: ADVERTISEMENTS: Show the forfeiture and re-issue entries … 7 per share. ii. Out of these, 15 shares were re-issued to … 13. Record the Journal Entries for Forfeiture and Reissue of Shares in the Following Cases: - Accountancy. • Therefore, the Directors forfeited their shares. Now on reissue of such shares at discount, the maximum discount could be Rs. Cloudflare Ray ID: 651f4e5a0b44edeb If the discount allowed on reissue of shares is less than the forfeited amount, there will be some balance left in the Forfeited Account, which should be transferred to capital reserve, because it is a profit of capital nature. 3 per share, these shares were reissued @ Rs. For example, if a share of Rs. • Journal Entries to be passed in this case can be shown as: No. Pass necessary journal entries for forfeiture and reissue. If you are at an office or shared network, you can ask the network administrator to run a scan across the network looking for misconfigured or infected devices. 35 — 20) will be a capital profit which will be transferred to Capital Reserve Account. TOS 7. Such shares can be reissued at par, at discount or at premium. The balance remaining in share forfeited account is in the nature of capital gain and would be closed by transfer to the capital reserve account. Out of these, 15 shares were reissued to Naresh as ₹ 7 per share paid-up for ₹ 8 per share. Accounting Treatment and Reissue Accounting. 100 each issued at a discount of 8% on these shares the first call of Rs. Every company according to the situation might issue the forfeited shares either at a premium or at par. Later on, the company reissued 100 shares of these forfeited shares at (I) Rs. Give journal entries to record the forfeiture of shares and their reissue 1. Rs. Her shares were forfeited. He paid applications money @ Rs. The following journal entry is passed for the forfeiture of shares initi ally issued at par: The following alternative entry can be passed for forfeiture of shares initi ally issued at par if calls in arrears a/c is debited, while preparing journal entries for the share amount received with exception of calls in arrears. 20 per share was yet to be called. 25 per share Make journal entries for the forfeiture and reissue of the shares in the books of company. The shares of C were then reissued at $7 per share as fully paid up. Journal Entries. When the forfeited shares are re-issued at par or at a premium, the entries are similar to the entries already passed in connection with the issue of shares at par or at premium. Out of these, 15 shares were reissued to Naresh as Rs.7 per share paid-up for Rs.8 per share. 65 is the unpaid amount. A Ltd. forfeited 300 equity shares of Rs. Mahima holding 100 shares did not pay final call of Rs 5 per share. Another way to prevent getting this page in the future is to use Privacy Pass. Content Guidelines 2. These shares were reissued at Rs. Your IP: 149.202.93.143 35 (say Rs. 9 per share as fully paid up. Such shares may be re-issued at par, at a premium or even at a discount. 5, but final call has not been paid by him. When the shares are forfeited, there are two options with the company, i.e., they can dispose of the shares, or the shares can be reissued. Privacy Policy 8. 3 per share and first and final call of Rs. Forfeiture of shares. 2 and allotment Rs. Forfeited Fully Called Up Capital. Share Forfeited A/c …Dr. List ‘B’ Contributory: Where the company goes into liquidation within one year of the forfeiture of … Make necessary journal entries for the forfeiture and for reissue of these shares if: 10 each, Rs. Record the journal entries for forfeiture and reissue of shares in the following cases: (a) X Ltd. forfeited 20 shares of Rs 10 each, Rs 7 called up on which the shareholder had paid application and allotment money of Rs 5 per share. If the shares were originally issued at premium, it is not necessary that their reissue after forfeiture is to be at premium. Report a Violation, Forfeiture of Shares when Shares Were Issued at Discount (Entries), Accounting Entries Regarding Issue of Shares at Par, SEBI Guidelines Regarding Rights Issues of a Company. In case the discount allowed is below Rs. Record the Journal Entries for Forfeiture and Reissue of Shares in the Following Cases: X Ltd. Performance & security by Cloudflare, Please complete the security check to access. To Share Final Call A/c (Forfeiture of shares issued at discount) This concludes our article on the topic of Reissue of Forfeited Shares, which is an important topic in Class 12 Accountancy for Commerce students.

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