Accounting for Share Capital — Part 2: Calls, Shares for Assets, Forfeiture, Re-issue and Disclosure: visual lesson, CBSE Class 12 Accountancy

Lesson

After allotment: calls, forfeiture and disclosure

Part 2 — calls in arrears and in advance, shares for assets, forfeiture, re-issue and the balance sheet.

In this lesson you will

Record calls in arrears and calls in advance
Record shares issued to vendors and promoters for consideration other than cash
Pass entries for forfeiture and re-issue of shares and transfer the gain to Capital Reserve
Present share capital in the balance sheet and notes to accounts under Schedule III

Part 2 at a glance

Concept

Calls in arrears

No interest on calls in arrears or in advance is computed in this chapter.
	With a Calls in Arrears Account	Without one
Entry for cash received	Bank A/c Dr, Calls in Arrears A/c Dr, To Share Call A/c	Bank A/c Dr, To Share Call A/c (cash only)
Where the unpaid amount sits	Debit balance of Calls in Arrears	Debit balance of the call account
In the balance sheet	Deducted from called-up capital	Deducted from called-up capital

Worked example

Worked example 6: allotment at Shivalik Foods

An imagined company in Dehradun, Shivalik Foods Ltd, issues 30,000 equity shares of ₹10 each at par, payable ₹3 on application, ₹3 on allotment, ₹2 on first call and ₹2 on second and final call; all are applied for. Ravi (600 shares) pays nothing after application; Sunita (400 shares) pays neither call; Kunal (1,000 shares) pays both calls with his allotment money.

Journal of the imagined Shivalik Foods up to allotment: allotment received with 1,800 debited to calls in arrears and 4,000 credited to calls in advance
Particulars	Dr (₹)	Cr (₹)
Bank A/c Dr	90,000
To Equity Share Application A/c		90,000
(Being application money received on 30,000 shares)
Equity Share Application A/c Dr	90,000
To Equity Share Capital A/c		90,000
(Being application money on 30,000 shares transferred to share capital)
Equity Share Allotment A/c Dr	90,000
To Equity Share Capital A/c		90,000
(Being allotment money due on 30,000 shares)
Bank A/c Dr	92,200
Calls in Arrears A/c Dr	1,800
To Equity Share Allotment A/c		90,000
To Calls in Advance A/c		4,000
(Being allotment money received; unpaid amount debited to calls in arrears; later calls received in advance)

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