Question

0.76. Jupiter Ltd. issued shares of 100 each at a premium of 40% payable as
Vinita, who applied for 700 shares and to whom 400 shares were allotted on
(Refer Illustration 80 for Solution)
Follows:
On Application
*50
On Allotment
On First & Final Call 20
*70 (including premium)
prorata basis did not pay allotment and her shares were immediately fofeited. Pass​

Answer 1

Answer:

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

ForfeitureAmount=ApplicationAmount

Substitute the values in above equation

ForfeitureAmount=Rs50

Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.

ForfeitureAmount=No.ofshares×ForfeitureAmount

Substitute the values in the above equationForfeitureAmount=100shares×Rs50=Rs5000

Forfeitureamountonreissue=100shares×Rs10=1000

Profit on the reissue is the profit earned by the company when the forfeited shares are reissued

Profitonreissue=ForfeitedAmountonforfeiture

Substitute the values in the above equation

Profitonreissue=Rs5000−Rs1000=Rs4000

Hence, the profit earned on the reissue of shares is Rs 4000.