Accountancy, asked by sharmajaideo5, 3 months ago

Umpire Ltd. forfeited 50 shares of Rs. 100 each issued at
10% premium (to be paid at the time of allotment) on which
first call of Rs.30 per share was not received, the second
and final call of Rs. 20 per share was not yet called. Out of
these, 20 shares were reissued as Rs.80 paid up for Rs.70
per share. Pass journal entries regarding forfeiture and
reissue of shares.​

Answers

Answered by rishupal2009
1

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 equation

ForfeitureAmount=50shares×Rs30=Rs1,500

ForfeitureAmountfor20shares=20shares×Rs30=Rs600.

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=Rs600−Rs0=Rs600

Hence, the profit earned on the reissue of shares is Rs 600.

Answered By

Genius

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