Question

'Swasth Ltd.' forfeited 2,000 shares of ₹ 10 each for non-payment of final call of ₹ 3 per share. 1,500 of these shares were reissued and gain on reissue transferred to Capital Reserve was ₹ 7,500. Determine the amount realised from reissue of shares.

Answer 1

Journal Entries
Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
1.	Bank A/c   ...Dr.		12,000
	Share Forfeiture A/c   ...Dr.		3,000
	To Share Capital A/c			15,000
	(1,500 forfeited shares reissued as fully paid-up)
2.	Share Forfeiture A/c   ...Dr.		7,500
	To Capital Reserve A/c			7,500
	(Gain on reissue transferred to Capital Reserve)

Working Note:

Face value per share: ₹ 10

Final Call unpaid: ₹ 3 per share

Amount received and forfeited per share:

₹ 10 − ₹ 3 = ₹ 7

Amount forfeited on 2,000 shares:

2,000 × ₹ 7 = ₹ 14,000

Out of these, 1,500 shares were reissued.

Forfeited amount relating to 1,500 shares:

`14,000 xx (1,500)/(2,000) = 10,500`

Given Capital Reserve:

₹ 7,500

Therefore, discount allowed on reissue:

₹ 10,500 − ₹ 7,500 = ₹ 3,000

Share Capital credited on reissue:

1,500 × ₹ 10 = ₹ 15,000

Amount realised from reissue:

₹ 15,000 − ₹ 3,000 = ₹ 12,000