R.Ltd forfeited 5000 shares of ₹ 10 each issued at 10% premium to S (₹ 9 called up) on which she did not pay ₹ 3 of allotment (including premium) and first call of ₹ 2. Out of these, ₹ 3000 shares were re-issued as fully paid up for ₹ 8 per share. Amount transferred to Capital reserve will be:
Answers
Shares Forfeited: 5000
Nominal Value: 10
Premium 10%
Called-up 9
Allotment Call 2+1
First Call 2
Re-issued 3000
Re-issue price 8
Re-issue status Fully Paid
Application Call = Called up – Allotment Call – First Call
= 9 – 2 – 2
= 5
Final Call = Nominal Value – Called-up
= 10 – 9
= 1
Forfeiture Cr. (Payment previously received on re-issued shares) = 3,000 x 5 = 15,000
Arrears on re-issued shares = 3000 x 5 = 15,000
Forfeiture Dr. (Loss on reissue taken from Forfeiture A/c) = 3000 x 2 = 6,000
Balance Credit in Forfeiture A/c for reissued shares = 9,000
So Rs. 9,000 will be transferred to Capital Reserve A/c
Share Capital A/c Dr. (5000 x 9) 27,000
Securities Premium A/c Dr. (5000 x 1) 3,000
To Share Forfeiture A/c (5000 x 5) 25,000
To Calls in Arrears A/c (5000 x 5) 25,000
(Being 5000 shares of S forfeited)
Bank a/c Dr. (3000 x 8) 24,000
Share Forfeiture a/c Dr. (3,000 x 2) 6,000
To Share Capital (3000 x 10) 30,000
(Being 3000 shares re-issued @ 8 per share as fully paid up and loss Rs.2 per share taken from Share Forfeiture A/c)
Forfeiture A/c Dr. (3000 x 3) 9,000
To Capital Reserve A/c (3000 x 3) 9,000
(Being excess amount received on 3000 shares adjusted to capital reserve)