Due to non payment of final call amount of Rs 2, a company has forfeited 1,000 shares of Rs 10 each . Afterward, these shares had been re-issued at 6 per share fully paid up. The amount of capital reserve will be
Answers
Explanation:
Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.
ForfeitureAmount=ApplicationAmount+AllotmentAmount
Substitute the values in above equation
ForfeitureAmount=Rs8
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=1000shares×Rs8=Rs8,000
Forfeitureamountonreissue=1000sahres×Rs2=Rs2,000
Profit on the reissue is the profit earned by the company when the forfeited shares are reissued
Profitonreissue=ForfeitedAmountonforfeiture+ForfeitedAmountonreissue
Substitute the values in the above equation
Profitonreissue=Rs8,000−Rs2,000=Rs6,000
Hence, the profit n reissue is Rs 6,000.