Forfeiture of Shares

a If the unpaid amount has been transferred to Calls in Arear.

Equity Share Capital Called up

To Discount on issue of Shares Discounted
To First Calls in Arear A/c Unpaid transferred to Calls in Arear
To Final Calls in Arear A/c Unpaid transferred to Calls in Arear
To Forfeited Shares A/c (Balance fig.) Amount Received

a If the unpaid amount has not been transferred to Calls in Arear.

Equity Share Capital Called up

To Discount on issue of Shares Discounted
To Equity First Calls A/c Unpaid not transferred to Calls in Arear
To Equity Final Calls A/c Unpaid not transferred to Calls in Arear
To Forfeited Shares A/c (Balance fig.) Amount Received
Problem-1
TATA Ltd forfeited 200 equity Shares of Rs. 10 each issued at par for
Non-payment of
First call of Rs. 2
Final call of Rs. 5

Pass journal entries for the forfeited shares:

a) If the unpaid amount has been transferred to Calls in Arear.
b) If the unpaid amount has not been transferred to Calls in Arear.

Solution-1
a If the unpaid amount has been transferred to Calls in Arear.

Equity Share Capital (200 x 10) 2000 Called up

To Discount on issue of Shares Discounted Discounted
To First Calls in Arear A/c (200 x 2) 400 Unpaid transferred to Call-in- Arear Amount Not Received
To Final Calls in Arear A/c (200 x 5) 1000 Unpaid transferred to Call-in- Arear Amount Not Received
To Forfeited Shares A/c (Balance fig.) 600 Amount Received Amount Received

b If the unpaid amount has not been transferred to Calls in Arear.

Equity Share Capital (200 x 10) 2000

To Discount on issue of Shares Discounted Discounted
To Equity First Calls A/c (200 x 2) 400 Unpaid not transferred to Call-in- Arear Amount Not Received
To Equity Final Calls A/c (200 x 5) 1000 Unpaid not transferred to Call-in- Arear Amount Not Received
To Forfeited Shares A/c (Balance fig.) 600 Amount Received Amount Received
Problem-2
Reliance Ltd forfeited 1000 equity Shares of Rs. 20 each issued at par for
Non-payment of
First call of Rs. 5
Final call of Rs. 8

Pass journal entries for the forfeited shares:

a) If the unpaid amount has been transferred to Calls in Arear.
b) If the unpaid amount has not been transferred to Calls in Arear.

Solution-2
a If the unpaid amount has been transferred to Calls in Arear.

Equity Share Capital (1000 x 20) 20000 Called up

To Discount on issue of Shares Discounted Discounted
To First Calls in Arear A/c (1000 x 5) 5000 Unpaid transferred to Call-in- Arear Amount Not Received
To Final Calls in Arear A/c (1000 x 8) 8000 Unpaid transferred to Call-in- Arear Amount Not Received
To Forfeited Shares A/c (Balance fig.) 7000 Amount Received Amount Received

b If the unpaid amount has not been transferred to Calls in Arear.

Equity Share Capital (1000 x 20) 20000

To Discount on issue of Shares Discounted Discounted
Unpaid not transferred to Call-in-
To Equity First Calls A/c (1000 x 5) 5000 Arear Amount Not Received
Unpaid not transferred to Call-in-
To Equity Final Calls A/c (1000 x 8) 8000 Arear Amount Not Received
To Forfeited Shares A/c (Balance fig.) 7000 Amount Received Amount Received
Problem-3a
Birla Ltd forfeited 250 equity Shares of Rs. 100 each issued at par for
Non-payment of
First call of Rs. 30
Final call of Rs. 20

Pass journal entries for the forfeited shares:

a) If the unpaid amount has been transferred to Calls in Arear.
b) If the unpaid amount has not been transferred to Calls in Arear.

Solution-3a
a If the unpaid amount has been transferred to Calls in Arear.

Equity Share Capital (250 x 100) 25000 Called up

To Discount on issue of Shares Discounted Discounted
To First Calls in Arear A/c (250 x 30) 7500 Unpaid transferred to Call-in- Arear Amount Not Received
To Final Calls in Arear A/c (250 x 20) 5000 Unpaid transferred to Call-in- Arear Amount Not Received
To Forfeited Shares A/c (Balance fig.) 12500 Amount Received Amount Received

b If the unpaid amount has not been transferred to Calls in Arear.

Equity Share Capital (250 x 100) 25000

To Discount on issue of Shares Discounted Discounted
To Equity First Calls A/c (250 x 30) 7500 Unpaid not transferred to Call-in- Arear Amount Not Received
To Equity Final Calls A/c (250 x 20) 5000 Unpaid not transferred to Call-in- Arear Amount Not Received
To Forfeited Shares A/c (Balance fig.) 12500 Amount Received Amount Received
Problem-3
Xavier Ltd forfeited 300 equity Shares of Rs. 50 each issued at par for
Non-payment of
First call of Rs. 20
Final call of Rs. 10

Pass journal entries for the forfeited shares:

a) If the unpaid amount has been transferred to Calls in Arear.
b) If the unpaid amount has not been transferred to Calls in Arear.

Solution-3
a If the unpaid amount has been transferred to Calls in Arear.

Equity Share Capital (300 x 50) 15000 Called up

To Discount on issue of Shares Discounted Discounted
To First Calls in Arear A/c (300 x 20) 6000 Unpaid transferred to Call-in- Arear Amount Not Received
To Final Calls in Arear A/c (300 x 10) 3000 Unpaid transferred to Call-in- Arear Amount Not Received
To Forfeited Shares A/c (Balance fig.) 6000 Amount Received Amount Received

b If the unpaid amount has not been transferred to Calls in Arear.

Equity Share Capital (300 x 50) 15000

To Discount on issue of Shares Discounted Discounted
To Equity First Calls A/c (300 x 20) 6000 Unpaid not transferred to Call-in- Arear Amount Not Received
To Equity Final Calls A/c (300 x 10) 3000 Unpaid not transferred to Call-in- Arear Amount Not Received
To Forfeited Shares A/c (Balance fig.) 6000 Amount Received Amount Received
Problem-4
Birla Ltd forfeited 400 equity Shares of Rs. 30 each issued at par for
Non-payment of
First call of Rs. 15
Final call of Rs. 10 (including discount Rs. 2

Pass journal entries for the forfeited shares:

a) If the unpaid amount has been transferred to Calls in Arear.
b) If the unpaid amount has not been transferred to Calls in Arear.

Solution-4
a If the unpaid amount has been transferred to Calls in Arear.

Equity Share Capital (400 x 30) 12000 Called up

To Discount on issue of Shares 800 Discounted Discounted
To First Calls in Arear A/c (400 x 15) 6000 Unpaid transferred to Call-in- Arear Amount Not Received
To Final Calls in Arear A/c (400 x 8) 3200 Unpaid transferred to Call-in- Arear Amount Not Received
To Forfeited Shares A/c (Balance fig.) 2000 Amount Received Amount Received

b If the unpaid amount has not been transferred to Calls in Arear.

Equity Share Capital (400 x 30) 12000 800

To Discount on issue of Shares 6000 Discounted Discounted
To Equity First Calls A/c (400 x 15) 3200 Unpaid not transferred to Call-in- Arear Amount Not Received
To Equity Final Calls A/c (400 x 10) 2000 Unpaid not transferred to Call-in- Arear Amount Not Received
To Forfeited Shares A/c (Balance fig.) 800 Amount Received Amount Received
Problem-5
Xavier Ltd forfeited 700 equity Shares of Rs. 60 each issued at par for
Non-payment of
First call of Rs. 30 (Excluding Discount Rs. 1
Final call of Rs. 10

Pass journal entries for the forfeited shares:

a) If the unpaid amount has been transferred to Calls in Arear.
b) If the unpaid amount has not been transferred to Calls in Arear.

Solution-5
a If the unpaid amount has been transferred to Calls in Arear.

Equity Share Capital (700 x 60) 42000 Called up

To Discount on issue of Shares 700 Discounted Discounted
To First Calls in Arear A/c (700 x 30) 21000 Unpaid transferred to Call-in- Arear Amount Not Received
To Final Calls in Arear A/c (700 x 10) 7000 Unpaid transferred to Call-in- Arear Amount Not Received
To Forfeited Shares A/c (Balance fig.) 13300 Amount Received Amount Received

b If the unpaid amount has not been transferred to Calls in Arear.

Equity Share Capital (700 x 60) 42000

To Discount on issue of Shares 700 Discounted Discounted
To Equity First Calls A/c (700 x 30) 21000 Unpaid not transferred to Call-in- Arear Amount Not Received
To Equity Final Calls A/c (700 x 10) 7000 Unpaid not transferred to Call-in- Arear Amount Not Received
To Forfeited Shares A/c (Balance fig.) 13300 Amount Received Amount Received