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Forfeited shares

CPT 1717 views 3 replies

Hi,

Mr. Bajaj who was the holder of 200 equity shares of Rs. 100 each of Canny Ltd. on which only Rs. 75 per share has been called up, couldn't pay his dues on allotment and first class each at Rs. 25 per share. The director forfeited the above shares and reissued 150 of such shares to Mr. Birla at Rs. 65 per share paid up as Rs. 75 per share. the amount to be transferred to capital reserve account will be? (explain)

 

Replies (3)

we have to find out forfeature amount 1st 200*25 = 5000

forfeature amount per share = 5000/200 = 25

loss on reissue of share (75-65)  = 10

                                                                  _____

                                                                   15

                                                                  _____

15*150 shares = 2250/-

Hi, Amount to be transferred to capital reserve is calculated as follows :

(Amopunt received from defaulting shareholder per share - discount allowed on reissue per share) x no. of shares reissued

= (25-10) * 150

= 2,250

Regards,

CA Shakuntala Chhangani

Total share s held is 200 of rs 100 each , 75 paid up. 
amt recieved by canny ltd on dis share is rs 25/ share ie 75 -25(allotmnt) -25(1st call)= 25
ie, canny ltd hs a capital profit of rs 25 per share wen dey r forfieted. ie, forfieted a/c will show a credit balance of 25*200= 5000 .
this can used to reissue dis shares on a discount. aftr issuin at discount the balance will b transferd to capital reserve.

in this problem only 150 shares are reissued . 
amt recieved by canny ltd on dese shares from the defaultin share holder is 150*25 =3750
discount allowed on reissue of dis shares is 150* 75-65= 1500

the balance ie 3750- 1500 = 2250 is trnsferd to capital reserve. 

cheers

 


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