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Enjoy Ltd. had allotted 10000 shares to applicants for 14000 shared on a pro rata basis.The amount payable was rs.2 on application,rs.5on allotment (including premium of rs.2 each,rs.3 on first call and rs.2 on final call.Vikash failed to pay the first nd final calls on his 300 shares.All the shares were forfeited out of them 200 shares were reissued @ rs.9 per share. Give the accounting treatment and also state the amount to be credited to capital reserve?
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Enjoy Ltd. had allotted 10000 shares to applicants for 14000 shared on...
Accounting Treatment for Forfeiture and Reissue of Shares
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* Forfeiture of Shares:
- Debit: Share Forfeiture A/c (300 shares * Rs.2) = Rs.600
- Credit: Share Capital A/c (300 shares * Rs.10) = Rs.3000
- Credit: Share Allotment A/c (300 shares * Rs.2) = Rs.600
- Credit: Share First Call A/c (300 shares * Rs.3) = Rs.900
- Credit: Share Final Call A/c (300 shares * Rs.2) = Rs.600

* Reissue of Shares:
- Debit: Bank A/c (200 shares * Rs.9) = Rs.1800
- Debit: Share Forfeiture A/c (100 shares * Rs.10) = Rs.1000
- Credit: Share Capital A/c (200 shares * Rs.10) = Rs.2000
- Credit: Capital Reserve A/c (Gain on Reissue) = Rs.800

* Capital Reserve:
- The amount to be credited to Capital Reserve is Rs.800, which is the gain on reissue of forfeited shares (Rs.2000 - Rs.1200).

Explanation:
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When Vikash failed to pay the first and final calls on his 300 shares, the company forfeited all his shares. The accounting treatment for forfeiture of shares involves debiting the Share Forfeiture A/c and crediting the Share Capital A/c, Share Allotment A/c, Share First Call A/c, and Share Final Call A/c. The forfeited shares were then reissued at a higher price of Rs.9 per share. The accounting treatment for reissue of shares involves debiting the Bank A/c and Share Forfeiture A/c and crediting the Share Capital A/c and Capital Reserve A/c. The Capital Reserve A/c is credited with the gain on reissue, which is the excess of reissue price over the forfeited price (Rs.2000 - Rs.1200 = Rs.800). This gain is transferred to Capital Reserve as it is not a revenue or capital receipt but a gain arising out of a capital transaction.
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Enjoy Ltd. had allotted 10000 shares to applicants for 14000 shared on a pro rata basis.The amount payable was rs.2 on application,rs.5on allotment (including premium of rs.2 each,rs.3 on first call and rs.2 on final call.Vikash failed to pay the first nd final calls on his 300 shares.All the shares were forfeited out of them 200 shares were reissued @ rs.9 per share. Give the accounting treatment and also state the amount to be credited to capital reserve?
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Enjoy Ltd. had allotted 10000 shares to applicants for 14000 shared on a pro rata basis.The amount payable was rs.2 on application,rs.5on allotment (including premium of rs.2 each,rs.3 on first call and rs.2 on final call.Vikash failed to pay the first nd final calls on his 300 shares.All the shares were forfeited out of them 200 shares were reissued @ rs.9 per share. Give the accounting treatment and also state the amount to be credited to capital reserve? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about Enjoy Ltd. had allotted 10000 shares to applicants for 14000 shared on a pro rata basis.The amount payable was rs.2 on application,rs.5on allotment (including premium of rs.2 each,rs.3 on first call and rs.2 on final call.Vikash failed to pay the first nd final calls on his 300 shares.All the shares were forfeited out of them 200 shares were reissued @ rs.9 per share. Give the accounting treatment and also state the amount to be credited to capital reserve? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Enjoy Ltd. had allotted 10000 shares to applicants for 14000 shared on a pro rata basis.The amount payable was rs.2 on application,rs.5on allotment (including premium of rs.2 each,rs.3 on first call and rs.2 on final call.Vikash failed to pay the first nd final calls on his 300 shares.All the shares were forfeited out of them 200 shares were reissued @ rs.9 per share. Give the accounting treatment and also state the amount to be credited to capital reserve?.
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