Practicing Success
A Ltd. forfeited 4,000 shares of ₹20 each, fully called up on which application money of ₹6 has been paid. Out of these 2,000 shares were reissued and ₹8,000 has been transferred to capital reserve. Calculate the rate at which the forfeited shares are reissued. |
₹18 per share ₹20 per share ₹22 per share ₹8 per share |
₹18 per share |
The correct answer is Option (1) - ₹18 per share. 4000 shares are forfeited. Journal entry for this- Share forfeiture balance for 4000 shares = 24000 When these are reissued ₹8000 will be transferred to capital reserve which means remaining (12000 -8000) i.e. ₹4000 used at discount at time of reissue. Journal entry for reissue- The share are reissued for ₹18 per share. |