Answer:

it may happen that some shareholders fail to pay one or moreinstalments. in such circumtances, the company can forfeit their shares, i.e cancel their allotment ant treat the amount already received thereon as forfeited to the company within the framework of the provision in its articles.

- for forfeiture of shares issued at par :

share capital a/c dr.      (called-up amount)

To share forfeiture a/c    (paid-up amount)

To share allotment a/c   

To share calls a/c        (individually)

(...... shares forfeited for non-payment of allotment money and calls made)

the balance of share forfeited account is shown as an addition to the total paid-up capital of the comapny under the head ''share capital'' under title ''equity and liabilities'' of the balance sheet till the forfeited shares are reissued.