Ravi Ltd. issued 50,000 shares of ₹10 each payable as ₹2 on application, ₹3 on allotment, ₹2.5 on first call, and ₹2.5 on the second and final call. All the amount was duly received except for the second and final call on 800 shares. These shares were forfeited. Out of these, 600 shares were re-issued as fully paid up in such a way that ₹2,100 were transferred to the capital reserve.
Calculate the amount received on re-issue of shares:

[2 marks]

₹3,600

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₹2,100

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₹2,400

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Solution

The correct option is A ₹3,600
Share Forfeiture = 800 x ₹7.5 = ₹6,000
For 600 shares = $\frac{₹ 6, 000}{800} \times 600$

= ₹4,500
Discount = ₹4,500 - ₹2,100 = ₹2,400
Discount per share = $\frac{₹ 2, 400}{600}$
= ₹4 per share
Re-issue Price = Nominal Value - Discount
= ₹10 - ₹4 = ₹6
Total Amount Received = 600 x ₹6
= ₹3,600

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Similar questions

Q. Ravi Ltd. issued 50,000 shares of ₹10 each payable as ₹2 on application, ₹3 on allotment, ₹2.5 on first call, and ₹2.5 on the second and final call. All the amount was duly received except for the second and final call on 800 shares. These shares were forfeited. Out of these, 600 shares were re-issued as fully paid up in such a way that ₹2,100 were transferred to the capital reserve.
Pass the journal entry for forfeiture of shares:

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Alfa Ltd. invited applications for issuing 75,000 equity shares of Rs 10 each. The amount was payable as follows :

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Application for 1,00,000 shares were received. Shares were allotted to the applicants on pro-rata basis and excess money received with applications was transferred towards sums due on first call.

Vibha who was allotted 750 share failed to pay the first call. Her shares were immediately forfeited. Afterwards, the second call was made. The amount due on second call was also received except on 1,000 shares, applied by Monika. Her shares were also forfeited. All the forfeited shares were re-issued to Mohit For Rs 9,000 as fully paid up. Pass necessary Journal entries in the books of Alfa Ltd. for the above transactions.

Jeevan Dhara Ltd. Invited applications for issuing 1,20,000 equity shares of Rs 10 each at a premium of Rs 2 per share. The amount was payble as follows :

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On allotment-Rs 5 (including premium).

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Application for 1,50,000 shares were received. Shares were allotted to all the applications on pro-rata basis. Excess money received on applications was adjusted towards sums due on allotment. All calls were made. Manu who had applied for 3,000 shares failed to pay the amount due on allotment and first and final call. Madhur who was allotted 2,400 Shares failed to pay the first and final call. Shares of both, Manu and Madhur were forfeited. The forfeited shares were re-issued at Rs 9 per share as fully paid up. Pass the necessary Journal entries for the above transactions in the books of Jeevan Dhara Ltd.

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 reissue of forfeited shares, balance of share forfeiture account transferred to capital reserve account will be _____.

Alfa Ltd. invited applications for issuing 75,000 equity shares of Rs 10 each. The amount was payable as follows:

$\begin{matrix} On Application and Allotment & Rs 4 per share On First Call & Rs 3 per share On Second and Final Call & Balance \end{matrix}$

Applications for 1,00,000 shares were received. Shares were allotted to all the applicants on pro-rata basis and excess money received with applications was transferred towards sums due on first call. Vibha who was allotted 750 shares failed to pay the first call. Her shares were immediately forfeited. Afterwards the second call was made.The amount due on second call was also received except on 1,000 shares applied by Monika. Her shares were also forfeited. All the forfeited shares were re-issued to Mohit for Rs 9,000 as fully paid up.

(a) Pass necessary journal entries in the books of Alfa LTd. for the above transactions.

(b) Which value has been followed by the Company while making allotment of shares?

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