The Directors of a limited Company resolved to forfeit 1000shares of Rs.7.50 paid up, for non-payment of the final call money of 2.50 per share 700 of these Shares were re-issued at Rs.7 per share. The amount to be transferred to capital Reserve A/c would be?
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Answer:
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Explanation:
Equity share final call A/c Dr. 2500
To Equity share capital 2500
(Being final call due)
Equity share capital A/c Dr. 10,000
To calls in arrear 2500
To share forfeiture 7500
(being shares forfeited)
Bank A/c Dr 4900
Share Forfeiture A/c Dr 2100
To Equity share capital 7000
(Being 700 shares re-issued)
Share forfeiture A/c 3150
To Capital Reserve 3150
(Being balance on 700 shares in share forfeiture account transferred to capital reserve)
Notes:- Balance in share forfeiture A/c = 7500
Amount for 700 shares = 7500/1000*700 = 5250
Less: Amount Utilised = (2100)
Balance left 3150