List of top Accountancy Questions on Share Forfeiture

Gokul Ltd. forfeited 1,000 shares of ₹10 each (₹8 called-up) for non-payment of ₹5 allotment (including ₹2 premium). If ₹3,200 was transferred to Capital Reserve after reissuing some shares at ₹7, how many shares were reissued?

Manas Ltd. forfeited 600 shares of ₹10 each for the non-payment of first call of ₹2 per share. The final call of ₹3 per share was not yet called. In the journal entry for forfeiture of shares, ‘Share Forfeiture Account’ will be:

Rajesh Ltd. forfeited 300 equity shares of ₹100 each, ₹70 called up for the non-payment of first call of ₹20 per share. Out of these shares, 100 shares were reissued @ ₹100 per share, ₹70 paid up. How much balance will remain in the share forfeiture account after reissue of 100 shares?

Java Ltd. forfeited 600 equity shares of ₹100 each ₹80 called up for the non-payment of first call of ₹20 per share. These shares were reissued at ₹90 per share fully paid up. The amount transferred to ‘Capital Reserve’ will be:

Cemto Ltd. forfeited 6,000 shares of ₹10 each issued at a premium of ₹2 per share for the non-payment of the \emph{final call} of ₹3 per share. Later, 300 of the forfeited shares were re-issued at ₹8 per share as fully paid. Pass the necessary journal entries for forfeiture and re-issue of shares. Also prepare the Share Forfeiture Account.

Why does a company forfeit shares?

Forfeiture of shares results in reduction of:

Balance of Share Forfeiture A/c is shown in the Balance Sheet under the item:

JK Ltd. forfeited 6,000 equity shares of ₹10 each issued at a premium of ₹2 per share for the non-payment of first call of ₹2 per share. The second and final call of ₹2 per share had not yet been made. The forfeited shares were reissued at a discount of ₹3 per share fully paid up.
Pass necessary journal entries for the above transactions in the books of the company. Also prepare ‘Share Forfeiture Account’.