Question

D Ltd. forfeited 200 shares of Rs. 10 each, Rs. 7 called up on which Ram had paid application money Rs. 3 per shares of these, 125 shares were re - issued to Shyam for Rs. 9 per share as fully paid up. The amount to be transferred to capital reserve on reissue of forfeited shares will be​

Answer 1

Let's do journal entry :

Share capital A/c Dr. (200×7). 1400

To forfeited share A/c (200×3). 600

To calls-in-arrears A/c(200×4). 800

(Bring shares forfeited)

Bank A/c Dr.(125×9). 1125

Forfeited share A/c Dr.(125 × 1) 125

To Share capital A/c. (125 × 10) 1250

(125 shared reissued at rs.9 per share)

• Calculation for gain on reissue

→ amt received in forfeiture/no. of share forfeited × no. of share reissued - discount

→ 600/200 × 125 - 125

→ 375 - 125

→ 250

Share forfeited A/c Dr . 250

To capital reserve. 250

(Gain on reissue)