Explanation
Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.
ForfeitureAmount=ApplicationAmount
Substitute the values in above equation
ForfeitureAmount=Rs4
Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.
ForfeitureAmount=No.ofshares×ForfeitureAmount
Substitute the values in the above equation
ForfeitureAmount=100shares×Rs4=Rs400
Forfeitureamountonreissue=100shares×Rs3=300
Profit on the reissue is the profit earned by the company when the forfeited shares are reissued
Profitonreissue=ForfeitedAmountonforfeiture
Profitonreissue=Rs400−Rs300=Rs100
Hence, the profit earned on the reissue of shares is Rs 100.
ForfeitureAmount=ApplicationAmount+AllotmentAmount
ForfeitureAmount=Rs20+Rs30=Rs50
ForfeitureAmount=50×50=Rs2500
ForfeitureAmountfor20shares=200×50=Rs1000
ForfeitureAmountforreissuedshares=20×10=Rs200
Profitonreissue=ForfeitedAmountonforfeiture−Forfeitedamountonreissue
Profitonreissue=Rs1000−Rs200=Rs800
Hence, the profit earned on the reissue of shares is Rs 800.
Share Forfeiture a/c Dr Rs800
To capital reserve a/c Rs800.
ForfeitureAmount=Rs3
ForfeitureAmount=300shares×Rs3=Rs900
ForfeitureAmountfor250share=250shares×Rs3=Rs750
Forfeitureamountonreissue=250shares×Rs2=500
Profitonreissue=Rs750−Rs500=Rs250
Hence, the profit earned on the reissue of shares is Rs 250.
ForfeitureAmountfor20=shares=200×50=Rs1000
ForfeitureAmountforreissuedshares=20=×0=Rs0
Profitonreissue=Rs1000−Rs0=Rs1000
Hence, the profit earned on the reissue of shares is Rs 1000.
ForfeitureAmount=Rs5
ForfeitureAmount=200shares×Rs5=Rs1000
ForfeitureAmountfor100share=100shares×Rs5=Rs500
Forfeitureamountonreissue=100shares×Rs2=200
Profitonreissue=Rs500−Rs200=Rs300
Hence, the profit earned on the reissue of shares is Rs 300.
Share Forfeiture a/c Dr. Rs300
To share capital a/ Rs300.
ForfeitureAmount=Rs2
ForfeitureAmount=10shares×Rs2=Rs20
ForfeitureAmountfor8shares=8shares×Rs2=Rs16
ForfeitureAmountonreissue=8shares×Rs0=Rs0
Profitonreissue=Rs16−Rs0=Rs16
Hence, the profit earned on the reissue of shares is Rs 16.
ForfeitureAmount=Rs30+Rs30=Rs60
Forfeiture amount is the money received by the company on forfeiture (cancellation of share) or on the reissue of share.
ForfeitureAmount=50shares×Rs60=Rs3,000
ForfeitureAmountfor20shares=20shares×Rs60=Rs1200
ForfeitureAmountonreissue=20shares×Rs50=Rs1000
Profitonreissue=Rs1200−Rs1000=Rs200
Hence, the profit earned on the reissue of shares is Rs 200
Share forfeiture a/c Dr.Rs200
To capital reserve a/c Rs200
Substitute the values in the above equationForfeitureAmount=10shares×Rs2=Rs20
ForfeitureAmountfor8share=8shares×Rs2=Rs16
Forfeitureamountonreissue=8shares×Rs2=Rs16
Profitonreissue=Rs16−Rs16=Rs0
Hence, the profit earned on the reissue of shares is Rs 00.
ForfeitureAmount=300×3=Rs900
ForfeitureAmountfor200shares=200×3=Rs600.
ForfeitureAmountforreissuedshares=200×2=Rs400
Profitonreissue=Rs600−Rs400=Rs200
Hence, the profit earned on the reissue of shares is Rs 200.
Substitute the values in the above equationForfeitureAmount=100shares×Rs5=Rs500
Forfeitureamountonreissue=50shares×Rs2+50shares×Rs3=Rs250
Profitonreissue=Rs500−Rs250=Rs250
Substitute the values in the above equationForfeitureAmount=50shares×Rs3=Rs150
Forfeitureamountonreissue=50shares×Rs12=Rs600
Profitonreissue=Rs150=Rs510
Hence, the profit earned on the reissue of shares is Rs 150.
ForfeitureAmount=Rs30
Substitute the values in the above equationForfeitureAmount=200shares×Rs30=Rs6000
Forfeitureamountonreissue=200shares×Rs10=Rs.2000
Profitonreissue=Rs6000−Rs2000=Rs4000
Hence, the profit earned on the reissue of shares is Rs 4000.
ForfeitureAmount=20shares×Rs5=Rs100
ForfeitureAmountfor15shares=15shares×Rs5=Rs75
ForfeitureAmountonreissue=15shares×Rs0=Rs0
Profitonreissue=Rs75−Rs0=Rs75
Hence, the profit earned on the reissue of shares is Rs 75.
Share forfeiture a/c Dr Rs75
To share capital a/c Rs75.
ForfeitureAmount=200shares×Rs5=Rs1,000
ForfeitureAmounton50shares=50shares×Rs5=Rs250
Forfeitureamountonreissue=50shares×Rs2=Rs100
Profitonreissue=ForfeitedAmountonforfeiture−ForfeitedAmountonreissue
Profitonreissue=Rs250−Rs100=Rs150
Hence, the profit on the reissue of shares is Rs 150.
Substitute the values in the above equationForfeitureAmount=100shares×Rs2=Rs200
ForfeitureAmountfor80share=80shares×Rs2=Rs160
Forfeitureamountonreissue=80shares×Rs2=Rs160
Profitonreissue=Rs160−Rs160=Nil
Hence, the profit earned on the reissue of shares is Nil.
ForfeitureAmount=Rs8
ForfeitureAmount=1000shares×Rs8=Rs8,000
Forfeitureamountonreissue=1000sahres×Rs2=Rs2,000
Profitonreissue=ForfeitedAmountonforfeiture+ForfeitedAmountonreissue
Profitonreissue=Rs8,000−Rs2,000=Rs6,000
Hence, the profit n reissue is Rs 6,000.
ForfeitureAmount=160shares×Rs2=Rs320
ForfeitureAmounton40shares=40shares×Rs2=Rs80
Forfeitureamountonreissue=40shares×Rs1=Rs40
Profitonreissue=Rs80−Rs40=Rs40
Hence, the profit on the reissue of shares is Rs 40.
ForfeitureAmount=500shares×Rs5=Rs2500
ForfeitureAmountfor125shares=125shares×Rs5=Rs625
ForfeitureAmountonreissue=125shares×Rs1=Rs125
Profitonreissue=Rs625−Rs125=Rs500
Hence, the profit earned on the reissue of shares is Rs 500.
ForfeitureAmount=100shares×Rs30=Rs3000
Forfeitureamountonreissue=100shares×Rs30=Rs3000
Profitonreissue=Rs3000−Rs3000=Rs0
Hence, the profit earned on the reissue of shares is Rs 0.
The extra 1 rupee paid by the shareholder on the reissue is not considered because it is a part of the security premium, not share forfeiture amount.
Profitonreissue=ForfeitedAmountonforfeiture−ForfeitedAmountonReissue
Share forfeiture a/c Dr. Rs16
To share forfeiture a/c Rs16.
ForfeitureAmount=Rs50
ForfeitureAmount=100shares×Rs50=Rs5,000
ForfeitureAmountfor40shares=40shares×Rs50=Rs2,000
ForfeitureAmountonreissue=40shares×Rs10=Rs400
Profitonreissue=Rs2,000−Rs400=Rs1,600
Hence, the profit earned on the reissue of shares is Rs 1,600.
ForfeitureAmount=Applicationpershare
ForfeitureAmount=Rs6
TotalshareforfeitureAmount=Sharesforfeited×Forfeitureamount
Substitute values in the above equation
TotalshareforfeitureAmount=48shares×Rs6=Rs288
Thus, the amount to be credited to share forfeiture account is Rs288 while shares are being forfeited or canceled.
ForfeitureAmount=100shares×Rs5=Rs500
ForfeitureAmountfor70shares=70shares×Rs5=Rs350
ForfeitureAmountonreissue=7shares×Rs0=Rs0
Profitonreissue=Rs350−Rs0=Rs350
Hence, the profit earned on the reissue of shares is Rs 350.
ForfeitureAmount=Rs10
ForfeitureAmount=200shares×Rs10=Rs2,000
ForfeitureAmountfor80shares=80shares×Rs10=Rs800
ForfeitureAmountonreissue=80shares×Rs5=Rs400
Profitonreissue=Rs800−Rs400=Rs400
Hence, the profit earned on the reissue of shares is Rs 400.
Share forfeiture a/c Dr. Rs400
To share capital a/c Rs400.
ForfeitureAmount=80shares×Rs5=Rs400
ForfeitureAmountfor20shares=20shares×Rs5=Rs100
ForfeitureAmountonreissue=20shares×Rs2=Rs40
Profitonreissue=Rs100−Rs40=Rs60
Hence, the profit earned on the reissue of shares is Rs 60.
Substitute the values in the above equationForfeitureAmount=100shares×Rs50=Rs5000
Forfeitureamountonreissue=100shares×Rs10=Rs1000
Profitonreissue=Rs5000−Rs1000=Rs4000
Hence, the profit earned on the reissue of shares is Rs 4000 and credited to capital reserve account.
ForfeitureAmount=100shares×Rs8=Rs800
Forfeitureamountonreissue=100shares×Rs1=Rs100
Profit on the reissue is the profit earned by the company when the forfeited shares are reissued and transferred to capital reserve account
Profitonreissue=Rs800−Rs100=Rs700
Hence, the amount credited to capital reserve accountis Rs 700.
Please disable the adBlock and continue. Thank you.