Question

Pioneers Ltd. forfeited 160 shares of ₹ 10 each on which the holder had paid only the application money of ₹ 2 per share. Out of these, 40 shares were reissued to Gaurav as fully paid for ₹ 9 per share. The gain on reissue is ______.

Options

• ₹ 320.

• ₹ 160.

• ₹ 40.

• None of these.

Answer 1

Pioneers Ltd. forfeited 160 shares of ₹ 10 each on which the holder had paid only the application money of ₹ 2 per share. Out of these, 40 shares were reissued to Gaurav as fully paid for ₹ 9 per share. The gain on reissue is ₹ 40.

Explanation:

Amount forfeited on 40 shares:

40 × ₹ 2 = ₹ 80

Discount on reissue:

40 × (₹ 10 − ₹ 9) = ₹ 40

Gain on reissue:

₹ 80 − ₹ 40 = ₹ 40