Question

'Y' Limited forfeited 150 shares of Nitesh of ₹ 10 each which was fully called-up where in₹ 3 on allotment and₹ 4 on last call was unpaid.The company reissued these shares @ rupees 8 each. pass necessary journal entries in the book of the company relating the forfeiture and reissue of shares​

Answer 1

Answer:

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Answer 2

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=Rs5

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=500shares×Rs5=Rs2500

ForfeitureAmountfor125shares=125shares×Rs5=Rs625

ForfeitureAmountonreissue=125shares×Rs1=Rs125

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=Rs625−Rs125=Rs500

Hence, the profit earned on the reissue of shares is Rs 500.