Question

Divya Ltd. forfeited 7,000 equity shares of 100 each issued at a
premium of 10%, for non-payment of first and final call of 40 per share.
The maximum amount of discount at which these shares can be reissued
will be :
(A) 2,80,000
(B) 4,20,000
(C) 4,90,000
(D) 3,50,000​

Answer 1

Answer:

420000

Explanation:

Answer 2

(B) 4,20,000

Explanation:

this Question is Related to Forfeiture of Shares

In this topic demand of question is  maximum amount of discount at which these shares can be reissue

means how much we have available balance in share forfeiture account

after forfeit the shares

Now, Come on Accounitng entry part

here come only one entry

we many times discussed

If you pass any journal entry, please come on

Basic rules of accounts

Increase in Asset (Debit)

Decrease in Asset (Credit)

Increase in Liability (Credit)

Decrease in Liability (debit)

Expenses and losses (debit)

Income and gain (credit)

journal

Aspect 1. Share capital will be debited, because at the time of issue

share capital is credited with called up capital but now company wants to

forfeiture the shares , so shares are cancelled, so shares Capital are decreased that's why its debited

Aspect 2. Share forfeiture will be credited because company forfeit the paid up amount by the shareholders and it's company income and we very well

Know Income is credited

Aspect 3.  Share First and final call will be credited because at the time of issue this amount is not paid by shareholders but know company arrange it by credited Share first and final Account

Journal Entry

Particulars                                  Dr.(Amount)        Cr.(Amount)

Share Capital A/C         Dr.             700000(7000 Shares x 100)

       To Share Forfeiture A/C                                420000(Balancing Figure)

        To Share First and Final A/C                         280000(7000 x 40)

(Being 7000 Shares are forfeited for non payment

of first and final call of Rs. 40)

we have available profit Rs. 420000 that can be used for maximum amount of discount at which these shares can be reissued

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