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X company Ltd. Forfeited 20 shares of rs.10 each on which rs.5 per share were paid.the company reissued these shares @ rs.8 paid up.amount transferrd to capital reserve will be?
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X company Ltd. Forfeited 20 shares of rs.10 each on which rs.5 per sha...
Transfer to Capital Reserve on Reissue of Forfeited Shares
Explanation:
When a company forfeits the shares of a shareholder, it cancels the shares and refunds the amount paid by the shareholder till the date of forfeiture. The forfeited shares can be reissued by the company at a later date. The reissue of forfeited shares is governed by the provisions of the Companies Act, 2013, and rules made thereunder.
Calculation:
In the given case, the X company Ltd. forfeited 20 shares of Rs. 10 each on which Rs. 5 per share were paid. The amount paid-up on these shares is Rs. 5 x 20 = Rs. 100. The company reissued these shares at Rs. 8 paid-up. The amount received on reissue of shares is Rs. 8 x 20 = Rs. 160.
The amount transferred to the capital reserve on reissue of forfeited shares is calculated as follows:
Step 1: Calculate the amount of discount allowed on reissue of shares:
Discount allowed on reissue of shares = Face value of shares - Amount received on reissue of shares
= Rs. 10 x 20 - Rs. 160
= Rs. 40
Step 2: Transfer the amount of discount allowed to the capital reserve:
Amount transferred to capital reserve = Discount allowed on reissue of shares
= Rs. 40
Therefore, the amount transferred to the capital reserve on reissue of forfeited shares is Rs. 40.
Explanation:
When a company forfeits the shares of a shareholder, it cancels the shares and refunds the amount paid by the shareholder till the date of forfeiture. The forfeited shares can be reissued by the company at a later date. The reissue of forfeited shares is governed by the provisions of the Companies Act, 2013, and rules made thereunder.
Calculation:
In the given case, the X company Ltd. forfeited 20 shares of Rs. 10 each on which Rs. 5 per share were paid. The amount paid-up on these shares is Rs. 5 x 20 = Rs. 100. The company reissued these shares at Rs. 8 paid-up. The amount received on reissue of shares is Rs. 8 x 20 = Rs. 160.
The amount transferred to the capital reserve on reissue of forfeited shares is calculated as follows:
Step 1: Calculate the amount of discount allowed on reissue of shares:
Discount allowed on reissue of shares = Face value of shares - Amount received on reissue of shares
= Rs. 10 x 20 - Rs. 160
= Rs. 40
Step 2: Transfer the amount of discount allowed to the capital reserve:
Amount transferred to capital reserve = Discount allowed on reissue of shares
= Rs. 40
Therefore, the amount transferred to the capital reserve on reissue of forfeited shares is Rs. 40.
Community Answer
X company Ltd. Forfeited 20 shares of rs.10 each on which rs.5 per sha...
Since the company forfeited 20 shares@ 10/- each on which 5/- per share paid up, share forfeiture account will be credited with Rs. 100
As the shares are reissued at Rs. 8 per share fully paid up, share forfeiture will be debited with Rs
40. The profit on reissue of shares should be transferred to capital reserves that is difference between share forfeiture debit and credit which is Rs. 60
Therefore amount transferred to capital reserves will be Rs. 60(100 - 40)
As the shares are reissued at Rs. 8 per share fully paid up, share forfeiture will be debited with Rs
40. The profit on reissue of shares should be transferred to capital reserves that is difference between share forfeiture debit and credit which is Rs. 60
Therefore amount transferred to capital reserves will be Rs. 60(100 - 40)
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X company Ltd. Forfeited 20 shares of rs.10 each on which rs.5 per share were paid.the company reissued these shares @ rs.8 paid up.amount transferrd to capital reserve will be?
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X company Ltd. Forfeited 20 shares of rs.10 each on which rs.5 per share were paid.the company reissued these shares @ rs.8 paid up.amount transferrd to capital reserve will be? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about X company Ltd. Forfeited 20 shares of rs.10 each on which rs.5 per share were paid.the company reissued these shares @ rs.8 paid up.amount transferrd to capital reserve will be? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for X company Ltd. Forfeited 20 shares of rs.10 each on which rs.5 per share were paid.the company reissued these shares @ rs.8 paid up.amount transferrd to capital reserve will be?.
X company Ltd. Forfeited 20 shares of rs.10 each on which rs.5 per share were paid.the company reissued these shares @ rs.8 paid up.amount transferrd to capital reserve will be? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about X company Ltd. Forfeited 20 shares of rs.10 each on which rs.5 per share were paid.the company reissued these shares @ rs.8 paid up.amount transferrd to capital reserve will be? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for X company Ltd. Forfeited 20 shares of rs.10 each on which rs.5 per share were paid.the company reissued these shares @ rs.8 paid up.amount transferrd to capital reserve will be?.
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