Question

(i) Company forfeited 1,000 equity shares of RS.10 each of a shareholder for non-
payment of allotment money of Rs.4 per share and call money of Rs.3 per share.
This shareholder had paid Rs.3 per share with application. Forfeited shares were
reissued at Rs.7 per share by company.​

Answer 1

Answer:

6000

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.