Surya Tubes limited issu d 20,000 shares of Rs 100 each. the due amount was received except for 500 shares on which Rs 75 per share was received. these 500 shares were forfeited and 300 shares were reissued for Rs 60 each fully paid-up. show the forfeited shares account and the balance sheet as at closing date
Answers
Answer:
Capital Reserve Rs. 10,500, Balance of Forfeited Sheet Account Rs. 15,000, B/S total Rs. 20,05,500.
Explanation:
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ANSWER
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=Rs10
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=200shares×Rs10=Rs2,000
ForfeitureAmountfor80shares=80shares×Rs10=Rs800
ForfeitureAmountonreissue=80shares×Rs5=Rs400
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=Rs800−Rs400=Rs400
Hence, the profit earned on the reissue of shares is Rs 400.
Share forfeiture a/c Dr. Rs400
To share capital a/c Rs400.