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Doubt relating to a problem of forfeiture and reissue of shares
Answers (9)
Sir,in the frist problem the face value of share is 10 then it was reissued to simple @ 8 per share and called up for 6 per share then 2 (10-8) will be loss on reissue then it would be debited to forfeited shares account in the bank entry, but it was credited to securities premium account in the bank entry and again 2 /- is transferred to capital reserve account ,How sir ?
Thread Starter
Poojitha JanaAns paper 1
As per the question Of Rs.10 - Rs.6 paid up i.e. Rs. 6 includes Re1 discount Rs.2 paid by dimple (which is being forfeited) and Rs.3 unpaid yet by dimple So the first entry Reversing capital 100*6 = 600 Dr Reversing Discount = 100*1 = 100 Cr Reversing unpaid call money = 100*3 = 300 Foreiture of paid amount = 100*2 = 200
Thread Starter
Poojitha JanaMam,could you please explain second entry also...
So when 80 shares are issued at Rs.8 (received cash 8 per share) Bank A/c Dr. 80*8= 640 To Equity share Capital A/c(only Rs.6 fully called) 80*6=480 To Share premium A/c (extra 2 received on reissue) 80*2 = 160
Thread Starter
Poojitha JanaMam,then the amount paid dimple will be shared to capital reserve account right
The balance in the forfeiture account will be transferred to capital reserve account