Share Issue and Forfeiture Quiz

Study Notes

X Ltd. issued 10,000 shares of ₹100 each at a 6% discount.
Application money: ₹25 per share
Allotment money: ₹34 per share
First & final call: ₹3 per share
Applications received for 9,000 shares, all accepted.
All application and allotment money collected except for the first & final call on 100 shares.
100 shares forfeited due to non-payment of the final call.
50 shares reissued at ₹90 per share as fully paid.

Journal Entries

(Note: Journal entries will vary slightly depending on the specific accounting framework followed)

Application:
- Bank Account Dr. (9000 x ₹25)| Share Capital Cr. (9000 x ₹25)
Allotment
- Bank Account Dr. (9000 x ₹34)| Share Capital Cr. (9000 x ₹34)
Forfeiture of shares:
- Share Capital Dr. (100 x ₹92) | Share Forfeiture Cr. (100 x ₹3)
Reissue of forfeited shares:
- Bank Account Dr. (50 x ₹90)| Share Forfeiture Cr. (50 x ₹160)
Important calculations - The amount of ₹92 represents the total amount of money already collected for the shares that were forfeited ((₹25 + ₹34))
The amount of ₹16 represents the total amount originally received for the shares which were reissued (₹90-(₹25 + ₹34 + ₹3)). This assumes that ₹90 is the reissued price.

Description

Test your understanding of share issues and forfeiture in X Ltd.'s financial scenario. This quiz will cover key journal entries and calculations related to the application, allotment, forfeiture, and reissue of shares in compliance with accounting standards.