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A company forfeited 100 equity shares of Rs. 100 each issued at premium of 50% (to be paid at the time of allotment) on which the first call money of Rs. 30 per share was not received, final call of Rs. 20 is yet to be made. These shares were subsequently reissued @ Rs. 70 per share at Rs. 80 paid up. The amount credited to capital reserve is: 
  • a)
    4000
  • b)
    2000
  • c)
    3000
  • d)
    None 
Correct answer is 'A'. Can you explain this answer?
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A company forfeited 100 equity shares of Rs. 100 each issued at premiu...
Calculation of amount credited to capital reserve:

1. Forfeited shares:

- Total value of forfeited shares = 100 x 100 = Rs. 10,000
- Premium on shares = 50% of face value = 50/100 x 100 = Rs. 50 per share
- Amount received on allotment = Face value + Premium = 100 + 50 = Rs. 150 per share
- First call money not received = Rs. 30 per share
- Total amount received = Rs. 120 per share (150 - 30)
- Total amount forfeited = Rs. 120 x 100 = Rs. 12,000

2. Reissue of shares:

- Reissued at Rs. 70 per share
- Paid-up value = Rs. 80 per share
- Discount on reissue = Rs. 10 per share (80 - 70)
- Total amount received on reissue = Rs. 70 x 100 = Rs. 7,000
- Capital Reserve = Discount on reissue x Number of shares reissued = Rs. 10 x 100 = Rs. 1,000
- Capital Reserve after reissue = Rs. 1,000

3. Adjustment entry:

- Forfeited shares account Dr. 12,000
- To Share capital account (100 x 100) 10,000
- To Share forfeiture account 2,000
- Share forfeiture account Dr. 2,000
- To Capital Reserve account 1,000
- To Capital Reserve account Dr. 1,000
- To Share premium account 1,000

Therefore, the amount credited to capital reserve is Rs. 1,000 on forfeiture and Rs. 3,000 on reissue, making a total of Rs. 4,000.
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A company forfeited 100 equity shares of Rs. 100 each issued at premiu...
Equity share capital a/c Dr 8000 to share first call acc. 3000 to sh forfeiture account. 5000 bank acc Dr 7000 sh forfeiture acc Dr 1000 to share capital a c 8000 sh forfeiture acc to s capital 1000. by s capital 5000 to capital reserve 4000
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A company forfeited 100 equity shares of Rs. 100 each issued at premium of 50% (to be paid at the time of allotment) on which the first call money of Rs. 30 per share was not received, final call of Rs. 20 is yet to be made. These shares were subsequently reissued @ Rs. 70 per share at Rs. 80 paid up. The amount credited to capital reserve is:a)4000b)2000c)3000d)NoneCorrect answer is 'A'. Can you explain this answer?
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A company forfeited 100 equity shares of Rs. 100 each issued at premium of 50% (to be paid at the time of allotment) on which the first call money of Rs. 30 per share was not received, final call of Rs. 20 is yet to be made. These shares were subsequently reissued @ Rs. 70 per share at Rs. 80 paid up. The amount credited to capital reserve is:a)4000b)2000c)3000d)NoneCorrect answer is 'A'. Can you explain this answer? 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 A company forfeited 100 equity shares of Rs. 100 each issued at premium of 50% (to be paid at the time of allotment) on which the first call money of Rs. 30 per share was not received, final call of Rs. 20 is yet to be made. These shares were subsequently reissued @ Rs. 70 per share at Rs. 80 paid up. The amount credited to capital reserve is:a)4000b)2000c)3000d)NoneCorrect answer is 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A company forfeited 100 equity shares of Rs. 100 each issued at premium of 50% (to be paid at the time of allotment) on which the first call money of Rs. 30 per share was not received, final call of Rs. 20 is yet to be made. These shares were subsequently reissued @ Rs. 70 per share at Rs. 80 paid up. The amount credited to capital reserve is:a)4000b)2000c)3000d)NoneCorrect answer is 'A'. Can you explain this answer?.
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