Forfeiture of Shares issued at Premium (Pro-rata Based)

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Explained the procedure and concept of calculating advance from members of the group allotted shares on pro rata basis. Further journal entries relating to forfeiture, reissue and capital reserve is shown.

Question Information :
Dharmender Ltd. offered to the public 20,000 shares of Rs.100 each at a premium of Rs.20 payable as follows :
Application - Rs.20 per share 1st Call - Rs.25 per share
Allotment - Rs.50 per share 2nd Call - Rs.25 per share
Applications were received for 35,000 shares out of which those for 10,000 shares were rejected outright; full allotment was made to the applicants for 5,000 shares and pro-rata allotment was made to balance.
Final Call was not made and a shareholder holding 300 shares to whom allotment was made on pro-rata basis failed to pay the allotment and first call money. His shares were forfeited. All the forfeited shares were reissued at Rs.70 per share as Rs.75 paid up. Pass Journal entries

Student can also watch following lectures related with the same topic :

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4. Forfeiture and Reissue of Shares (without pro-rata) :
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5. Forfeiture of Shares - Hidden Adjustment of Premium (Pro-rata allotment) :
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