A compay 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
4,000 has been transtferred to capital reserve. Calculate the rate at which these
shares were reissued.
(a) 10 Per share (b) 9 Per share (c) 11 Per share (d) 8 Per share
Answers
Answer:
(b) 9 per share is correct.
Answer:
The correct option is B.
Explanation:
Journal Entries
Share capital ac dr 40000
To calls in arrear ac 28000
To share forfeiture ac 12000
Bank ac dr 18000
Share forfeiture ac dr 2000 ... (w.n.1)
To share capital ac 20000
Share forfeiture ac dr 4000
To capital reserve ac 4000
Working note:
Share forfeited (related to reissue)
=12000×2000/4000 =6000
Now, amount transferred to capitalreserve=4000
Therefore, discount allowed on reissue
=6000-4000=2000
Thus, share reissued at =(20000-2000)/2000=9
Ans: Shares reissued at Rs.9 per share
What are shares?
Shares are units of property ownership in a corporation. For some companies, shares exist as a financial asset ensuring an even distribution of any residual profits, if declared, in the form of dividends. Shareholders of shares that do not pay any dividends do not participate in the distribution of profits. Instead, they expect to share in the rise in the share price as the company's profits rise.
Stocks represent shares of a company, with the two main types of stock being common stock and preferred stock. As a result, "shares" and "shares" are commonly used interchangeably.
KEY SHOTS
Shares represent equity ownership in a corporation or a financial asset owned by investors who exchange capital in exchange for these units.
Common stock allows for voting rights and possible returns through price appreciation and dividends.
Most companies have shares, but only shares of publicly traded companies are listed on stock exchanges.
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