A ltd. forfeited 100 shares whose face value is Rs.10 each is rs. 3.50 per share paid up value. it can be reissued maximum upto.
Answers
Explanation:
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=Rs4
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=100shares×Rs4=Rs400
Forfeitureamountonreissue=100shares×Rs3=300
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=Rs400−Rs300=Rs100
Hence, the profit earned on the reissue of shares is Rs 100.