19 October 2011
Q. Mr. Big who was the holder of 200 equity shares of Rs.100 each on which Rs.75 per share has been called up could not pay his dues on allotment and first call each at Rs.25 per share. The Directors forfeited the above shares and reissue 150 of such shares to Mr. Small at Rs.65 per share paid-up as Rs.75 per shares. The amount to be transferred to Capital Reserve account will be
30 October 2011
HI, the answer to ur question is : GIven, called up capital = Rs. 75 per share unpaid capital = 25 allotmt + 25 call = Rs.50 Therefore, paid up capital = 75 - 50 =25 p.s. upon forfeiture, this amount is not refunded back to the shareholder, hence it can be treated as initial profit. Discount on reissue = Rs. 10 (75 - 65) Final profit for co. upon reissue = 25 - 10 = Rs. 15 per share reissued No. of shares reissued = 150 Amt. to be transf. to CR = 150 x Rs. 15 = Rs. 2,250 Regards, CA Shakuntala Chhangani
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