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Bank balance not adjusted... Why?
Accountancy
In the pdf attached, in illustration 7, in last paragraph of question, there is an adjustment given for shares forfeited and reissued. But the amount collected on re issue is not added to bank balance which is given inside the trial balance. Can you please explain why? Atleast to the tune of gain on forfeiture, the bank balance has to be increased..... Right??! Please clarify my doubt.
Answers (12)
Radhika Bajaj
However, The balance, if any, left in Share Forfeited A/c, in respect of shares reissued , should be treated as capital profit and transferred to Capital Reserve A/c. So see in notes of reserve and surplus it's showing in capital reserve (90-40)
Actually, you didn't understand my doubt. I didn't asked abt the procedure of share forfeiture. My doubt is, why the Amt received on reissue of forfeited shares is not added to Bank balance?
Radhika Bajaj
I didn't get it too
Please look at this image, you may understand what i am asking for......
CA Suraj Lakhotia Admin
The bank balance is already updated since the amount is given as on 31st March. You need to look at equity share capital account which has a balance of 8,05,000 5000 represents 1000 x (90-40). This needs to be corrected.
You mean that exceed 5000 in equity share capital actually have to be mentioned as capital reserve but they have wrongly posted...... We have to correct that...... This means that forfeiture is already accounted but issue is wrong positing....... Right?