4a))A limited forfeited 50 shares of 10 each due to the non payment of final call money of 3 per share.
out of these 20 shares were re issued at 8 per share
b)B limited for forfeited 500 shares of sachin due to the non payment of allotmoney and the final cal
of 40 and 30 respectively these shares were issued to him @120/share including premium of 20 per
share. subsequently these shares are re issued to hussain @110
Pass the necessary for forfeiture and reissue
(6)
Answers
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=Rs30
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 equation
ForfeitureAmount=50shares×Rs30=Rs1,500
ForfeitureAmountfor20share=20shares×Rs30=Rs600
Forfeitureamountonreissue=20shares×Rs10=200
Profit on the reissue is the profit earned by the company when the forfeited shares are reissued
Profitonreissue=ForfeitedAmountonforfeiture−Forfeitedamountonreissue
Substitute the values in the above equation
Profitonreissue=Rs600−Rs200=Rs400
Hence, the profit earned on the reissue of shares is Rs 400.
Share Forfeiture a/c Dr. Rs400
To capital reserve a/c Rs400.