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you are required to pass journal entries in the books of the company to record these 617013

The following is an extract from the balance sheet of a company as on 31 March 2011:


Share Capital:


40,000 9% Preference Shares of Rs.50

Fully Paid

2,00,000 Equity Shares of Rs.10 Each


Rs.7.50 Per Share

Called Up

Less: Calls Unpaid



Securities Premium Account


General Reserve


Calls in Advance (Final Call On Equity Shares)


On 1 April 2011, the Board of Directors decide the following:

  1. The fully paid preference shares are to be redeemed at a premium of 5% in May 2011, and for the purpose, 1,00,000 equity shares of Rs.10 each are to be issued at par to be paid for in full on application in April 2011
  2. The final call of Rs.2.50 per share is to be made in July 2011
  3. The 2,000 equity shares owned by X, an existing shareholder, who failed to pay the allotment money of Rs.2.50 per call, were forfeited in the month of June 2011

The above decisions were duly complied with according to the time schedule laid down. The amount due on the issue of fresh equity shares and on final call were duly received except from Y, who has failed to pay the final call money also. Those shares of Y were forfeited in the month of August 2011. Of the total shares forfeited, 3,000 were issued to Z in September 2011, credited as fully paid at Rs.9 per share, the whole of X’s shares being included.

You are required to pass journal entries in the books of the company to record these transactions and show the relevant items on the liabilities side of the balance sheet (necessary extracts) according to the form prescribed by the Companies Act, 1956. Assume that the resources required for payment are available.

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