wiz-icon
MyQuestionIcon
MyQuestionIcon
1
You visited us 1 times! Enjoying our articles? Unlock Full Access!
Question

A limited Company forfeited 100 equity shares of the face value of Rs 10 each, Rs 6 per share called up, for non payment of first call of Rs 2 per share. The forfeited shares were subsequently re-issued as fully paid Rs 7 each. The Profit on re-issue is ________.

A
Rs 400,
No worries! We‘ve got your back. Try BYJU‘S free classes today!
B
Rs 300,
No worries! We‘ve got your back. Try BYJU‘S free classes today!
C
Rs 100,
Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses
D
None of these
No worries! We‘ve got your back. Try BYJU‘S free classes today!
Open in App
Solution

The correct option is C Rs 100,

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=Rs4

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=100shares×Rs4=Rs400

Forfeitureamountonreissue=100shares×Rs3=300

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=Rs400Rs300=Rs100

Hence, the profit earned on the reissue of shares is Rs 100.


flag
Suggest Corrections
thumbs-up
0
similar_icon
Similar questions
View More
Join BYJU'S Learning Program
similar_icon
Related Videos
thumbnail
lock
Arithmetic Progression - Sum of n Terms
MATHEMATICS
Watch in App
Join BYJU'S Learning Program
CrossIcon