How to calculate capital reserve amount after reissue of forfeited share

Question

Answer

Answer

Total amount of forfeited share
___________________________ * total no of reissue share
total no of forfeited share
then,

amount of that forfeited share -loss on issue of forfeited share
than,
the amount will be transfer to capital reserve

Answer

(total amount of share forfieted/no.of forfieted shares-no. of reissued shares)-loss on reissue of shares

Answer

Total amount of share forefieted - amount used in reissue of forefieted shares

Answer

At the time of reissue of forfeited shares a discount of Rs 2 per share is allowed so the total amount of discount of Rs 400 is adjusted from the forfeited amount of Rs 600 and the balance amount of Rs 200 is transferred to Capital Reserve A/c being a capital gain.

Answer

Calculating Capital Reserve After Reissue of Forfeited Shares

When a company forfeits shares, it means that the shareholder is required to surrender their shares back to the company due to non-payment of calls or other reasons. However, if the company decides to reissue the forfeited shares, it must determine the amount of capital reserve that will result from the reissue. Here's how to calculate that amount:

Determine the Forfeited Share Capital

The first step is to determine the amount of forfeited share capital. This is the amount of capital that was initially subscribed by the shareholder but was forfeited due to non-payment of calls or other reasons. To calculate this amount, multiply the number of forfeited shares by the nominal value of each share.

Determine the Reissued Share Capital

Next, determine the amount of reissued share capital. This is the amount of capital that will be raised when the forfeited shares are reissued. To calculate this amount, multiply the number of reissued shares by the nominal value of each share.

Calculate the Capital Reserve

The capital reserve is the difference between the forfeited share capital and the reissued share capital. To calculate this, subtract the reissued share capital from the forfeited share capital. The resulting amount is the capital reserve.

Example Calculation

Let's say that a company forfeited 100 shares with a nominal value of $10 each. The forfeited share capital would be:

100 shares x $10 nominal value = $1,000

If the company decides to reissue 80 of those shares at the same nominal value of $10 each, the reissued share capital would be:

80 shares x $10 nominal value = $800

To calculate the capital reserve, subtract the reissued share capital from the forfeited share capital:

$1,000 forfeited share capital - $800 reissued share capital = $200 capital reserve

In this example, the company would have a capital reserve of $200 as a result of reissuing the forfeited shares.

Conclusion

Calculating the capital reserve after reissuing forfeited shares is a straightforward process that involves determining the forfeited share capital, the reissued share capital, and then subtracting the latter from the former. The resulting amount is the capital reserve.

Answer

1)if all forfeited shares are reissued then amt. of share forfeiture a/c amt . left is transferred
2)if some shares are reissued then amt available of forfeiture a/c for forfeiture of that no. of share is found out and after reissue left amt. is transferred to cap. reserve.
amt. of forfeiture ac for shares which are not reissued is added to subscribed capital in notes to accounts

if you are not able to understand than you can chat on edurev

Answer

Profit on reissued share less loss on reissue (if any).

Answer

Amount given of that shareholder - loss on reissue

Answer

How can do the working note of pro rata allotment in share capital?

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It's depend upon reissue of forfieted share.
if forfieted share has not changed then direct fofeitured transfer less forfieted

Answer

When all forfeited are reissued and there is no any discount alloted on reissue, so the amount of capital reserve is equal s to forfeited amount.
(forfeited share amt.= Capital reserve)
but when all forfeited share not reissued then,
(reissued share × max. permissible discount)
or, when there is any discount alloted then,

(reissued share ×max. permissible discount-discount allot.)

its my personal approach , keep learning keep exploring

hope it will help you

Similar Commerce Doubts

ABC Ltd. purchased for cancellation its own 5,000, 9% debentures of 100 each for 95 per debenture. the brokerage charges 15,000 were incurred. calculate amount to be transferred to capital reserve ?

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