KMHD Ltd. forfeited 200 shares of Rs 100 each on which Rs 50 per share has been called and Rs 6,000 has been paid. The company then re-issued the above mentioned shares to Mr. Singh upon payment of Rs 18,000 credited as fully paidKMHD Ltd. forfeited 200 shares of Rs 100 each on which Rs 50 per share has been called and Rs 6,000 has been paid. The company then re-issued the above mentioned shares to Mr. Singh upon payment of Rs 18,000 credited as fully paid. Pass the jounalize entries forfeiture and re-issued of shares.
Answers
Answer:
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=Rs30
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 equationForfeitureAmount=200shares×Rs30=Rs6000
Forfeitureamountonreissue=200shares×Rs10=1000
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=Rs6000−Rs1000=Rs5000
Hence, the profit earned on the reissue of shares is Rs 5000.
KMHD Ltd. forfeited 200 shares of RS
100 each issued at a discount of 5%
on which RS 50 per share has been
called an RS 6,000 has been paid
the company than re-issue the
above mentioned shares to Mr. sing
upon payment of RS 18,000 credited
as fully paid. The profiton re-issue is
= RS 5,ooo,