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X Ltd. forfeited 1,500 shares of ₹10 each ( originally issued at a premium of of ₹3 per share which was payable along with application money) on which allotment money of ₹3 and first call money of ₹ 2 were not received; the final call money of ₹3 is not yet called. these shares were originally allotted on pro- rata basis in the ratio of 3:2 .these shares were subsequently reissued at a discount of ₹1 per share , credited as ₹7 paid up?
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X Ltd. forfeited 1,500 shares of ₹10 each ( originally issued at a pre...
Profits on forfeiture of share 4500
loss on reissue of share 1500
so, balance transfer in capital reserve =3000
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X Ltd. forfeited 1,500 shares of ₹10 each ( originally issued at a pre...
Forfeiture of Shares

  • X Ltd. forfeited 1,500 shares of ₹10 each (originally issued at a premium of ₹3 per share which was payable along with application money).

  • Allotment money of ₹3 and first call money of ₹2 were not received, and the final call money of ₹3 is not yet called.



Reissuing of Forfeited Shares

  • The forfeited shares were originally allotted on a pro-rata basis in the ratio of 3:2.

  • The company subsequently reissued these shares at a discount of ₹1 per share.

  • The reissued shares were credited as ₹7 paid up.



Explanation

  • Forfeiture of shares means the cancellation of shares due to non-payment of the required amount by the shareholder.

  • In this case, X Ltd. forfeited 1,500 shares as the allotment and first call money was not received.

  • However, the final call money was not yet called, which means there is still a possibility that the shareholder may pay the remaining amount and get the shares back.

  • As per the company's policy, the forfeited shares were reissued at a discount of ₹1 per share, which means the new shareholders have to pay only ₹7 per share instead of the original ₹10 per share.

  • The reissued shares were credited as ₹7 paid up, which means the new shareholders have to pay only ₹7 per share at the time of allotment and not the remaining amount.

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X Ltd. forfeited 1,500 shares of ₹10 each ( originally issued at a premium of of ₹3 per share which was payable along with application money) on which allotment money of ₹3 and first call money of ₹ 2 were not received; the final call money of ₹3 is not yet called. these shares were originally allotted on pro- rata basis in the ratio of 3:2 .these shares were subsequently reissued at a discount of ₹1 per share , credited as ₹7 paid up?
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