a company forfeited 4,000 shares of'10 each on which application money of 3 has been paid. out of these 2,000 shares were reissued as fully paid up and 4000 has been transferred to capital reserve. calculate the rate at which this share was reissued?
Answers
Let's do journal entry :
Share capital A/c Dr. 40000
To forfeited share A/c 12000
To calls-in-arrears A/c. 28000
(Being shares forfeited)
Calculation of the rate at which share reissued
→ amt received on reissue/no. of shares reissue
→ 4000/2000 = Rs.2
Hence,rate at which shares reissued is Rs.2
More to know
Bank A/c Dr.(2×2000) 4000
Forfeited share A/c (8×2000) 16000
To share capital A/c(10×2000). 2000
(2000 shares out of forfeited shares reissued at rs.2 per share fully paid-up)
Calculation of gain on reissue
- FORMULA
→ Total forfeited amt/no. of share forfeited × no. of share reissued - discount
→ 40000/4000 × 2000 - 16000
→ 20000 - 16000
→ 4000
Share forfeited A/c Dr. 4000
To capital reserve A/c. 4000
(Gain on reissue)
Rs2 is the rate at which share was reissued..