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Forfeiture of Shares-Issued at Premium

D Ltd. issued...

Question

D Ltd. issued 1,00,000 equity shares of Rs 10 each at a premium of Rs. 2 per share. The amount payable was Rs. 2 on application, Rs. 5 on allotment (including premium) & rest on first & final call. Applications were received for 1,20,000 shares. Excess application money was refunded to applications. All monies due were received except the allotment and first & final call monies on 1,000 shares. These shares were forfeited and reissued at Rs 9 per share.
On reissue of forfeited shares, balance of share forfeiture account transferred to capital reserve account will be _____.

Rs. 3000

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Rs. 5000

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Rs. 8000

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Rs. 1000

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Solution

The correct option is A Rs. 1000
Here, 1000 shares were forfeited and reissued at Rs 9 per share which makes the amount gained to be Rs 9,000. Earlier, D Ltd. issued shares at Rs 10 per share and hence amount payable on 1,000 shares was Rs 10,000. Hence, after re-issuance of forfeited shares, discount debited to share Forfeiture Account will be difference between earlier share price and reissued forfeited share price i.e. Rs 1,000 which will be transferred to capital reserve account.

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Similar questions

Q. D Ltd. issued 1,00,000 equity shares of Rs 10 each at a premium of Rs. 2 per share. The amount payable was Rs. 2 on application, Rs. 5 on allotment (including premium) & rest on first & final call. Applications were received for 1,20,000 shares. Excess application money was refunded to applications. All monies due were received except the allotment and first & final call monies on 1,000 shares. These shares were forfeited and reissued at Rs 9 per share.
On forfeiture of shares, Share Forfeiture Account will be credited by_____.

Q. B Ltd. issued 1,00,000 equity shares of Rs. 10 each to the public at par. The details of the amount payable are as follows:
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Allotment Rs. 3.00
First & final call Rs. 5.00
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Q. AB Ltd. invited applications for issuing 75,000 equity shares of Rs 100 each at a premium of Rs 30 per share. The amount way payable as follows:
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