Question

Harish Ltd. forfeited 500 shares of ₹100 each issued at 40% premium (₹70 called up) on which application & allotment of ₹80 each (including premium) has been received. Out of these, ......... shares were reissued for ₹65 per share (₹70 paid up) and ₹7,000 were transferred to Capital Reserve. How many shares were re-issued?

Options

• 93

• 175

• 500

• 200

Answer 1

200

Explanation:

Issue at 40% premium = premium = ₹40

Amount received on application & allotment = ₹80 (incl. ₹40 premium) ⇒ capital received = ₹40.

Called-up capital = ₹70 ⇒ capital unpaid = ₹30.

Forfeiture credit per share = ₹40

Reissued at ₹65 as ₹70 paid-up ⇒ discount = ₹5 per share

40 − 5 = 35

`(7,000)/35`

= 200