MCQ Questions for Class 12 Commerce Accountancy Accounting For Share Capital Quiz 10

A limited Company forfeited 100 equity shares of the face value of Rs 10 each, Rs 6 per share called up, for non payment of first call of Rs 2 per share. The forfeited shares were subsequently re-issued as fully paid Rs 7 each. The profit on re-issue is ________.

0%
Rs 400,
0%
Rs 300,
0%
Rs 100,
0%
None of these

Explanation

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

$Forfeiture\quad Amount=Application\quad Amount$

Substitute the values in above equation

$Forfeiture\quad Amount=Rs4$

Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.

$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$

Substitute the values in the above equation

$Forfeiture\quad Amount=100shares \times Rs4= Rs400$

$Forfeiture\quad amount\quad on\quad reissue=100shares \times Rs3=300$

Profit on the reissue is the profit earned by the company when the forfeited shares are reissued

$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture$

Substitute the values in the above equation

$Profit\quad on\quad reissue= Rs400-Rs300= Rs100$

Hence, the profit earned on the reissue of shares is Rs $100$ .

H Ltd. forfeited 50 shares of Rs 100 each issued at 10% premium (to be paid at the time of allotment) on which first call of Rs 30 per share was not received, the second & final call of Rs 20 per share was not yet called. If 20 of these shares were re-issued as Rs 80 paid-up for Rs 70 per share, the Profit on re-issue is _________.

0%
Rs 2,500,
0%
Rs 2,300,
0%
Rs 1,500,
0%
Rs 800,

Explanation

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

$Forfeiture\quad Amount=Application\quad Amount\quad +\quad Allotment\quad Amount$

Substitute the values in above equation

$Forfeiture\quad Amount=Rs20 +Rs30= Rs50$

Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.

$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$

Substitute the values in the above equation

$Forfeiture\quad Amount=50 \times50= Rs2500$

$Forfeiture\quad Amount\quad for\quad 20\quad shares= 200\times 50= Rs1000$

$Forfeiture\quad Amount\quad for\quad reissued\quad shares=20\times 10= Rs200$

Profit on the reissue is the profit earned by the company when the forfeited shares are reissued

$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture- Forfeited\quad amount\quad on\quad reissue$

Substitute the values in the above equation

$Profit\quad on\quad reissue=Rs 1000- Rs 200= Rs 800$

Hence, the profit earned on the reissue of shares is Rs $800$ .

Share Forfeiture a/c Dr Rs800

To capital reserve a/c Rs800.

Alok Ltd. forfeited 300 shares of Rs 10 each, fully called up, held by Ram for non payment of allotment money of Rs 3 per share and final call money of Rs 4 per share. Out of these shares 250 were re-issued to Shyam for a total payment of Rs 2,The profit on re-issue is-

0%
Rs 900,
0%
Rs 400,
0%
Rs 750,
0%
Rs 250,

Explanation

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

$Forfeiture\quad Amount=Application\quad Amount$

Substitute the values in above equation

$Forfeiture\quad Amount=Rs3$

Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.

$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$

Substitute the values in the above equation

$Forfeiture\quad Amount=300shares \times Rs3= Rs900$

$Forfeiture\quad Amount\quad for\quad 250share= 250shares \times Rs3= Rs750$

$Forfeiture\quad amount\quad on\quad reissue=250shares \times Rs2=500$

Profit on the reissue is the profit earned by the company when the forfeited shares are reissued

$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture$

Substitute the values in the above equation

$Profit\quad on\quad reissue= Rs750-Rs500= Rs250$

Hence, the profit earned on the reissue of shares is Rs $250$ .

G Ltd. forfeited 50 shares of Rs 100 each issued at 10% premium (to be paid at the time of allotment) on which first call of Rs 30 per share was not received, the second & final call of Rs 20 per share was not yet called. If 20 of these shares were re-issued as Rs 80 called up for Rs 80 per share, the profit on re-issue is-

0%
Rs 2,500
0%
Rs 2,300
0%
Rs 1,500
0%
Rs 1,000

Explanation

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

$Forfeiture\quad Amount=Application\quad Amount+Allotment\quad Amount$

Substitute the values in above equation

$Forfeiture\quad Amount=Rs20+ Rs30=Rs50$

Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.

$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$

Substitute the values in the above equation

$Forfeiture\quad Amount=50 \times50= Rs2500$

$Forfeiture\quad Amount\quad for\quad 20= shares= 200\times 50= Rs1000$

$Forfeiture\quad Amount\quad for\quad reissued\quad shares=20=\times 0= Rs0$

Profit on the reissue is the profit earned by the company when the forfeited shares are reissued

$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture- Forfeited\quad amount\quad on\quad reissue$

Substitute the values in the above equation

$Profit\quad on\quad reissue=Rs1000- Rs0= Rs 1000$

Hence, the profit earned on the reissue of shares is Rs $1000$ .

National Heavy Chemicals Ltd. issued 5,000 shares of Rs 10 each at a premium of Rs 2 per share for public subscription, payable as Rs 5 on Application and Rs 7 on allotment (including premium). Rajesh who was allotted 200 shares by the Company failed to pay the allotment amount and his shares were forfeited by the Company. 100 out of these forfeited shares were allotted to Brijesh as fully paid up for Rs 8 per share. The profit on re-issue is ____________.

0%
Rs 1,000
0%
Rs 800
0%
Rs 300
0%
None of these

Explanation

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

$Forfeiture\quad Amount=Application\quad Amount$

Substitute the values in above equation

$Forfeiture\quad Amount=Rs5$

Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.

$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$

Substitute the values in the above equation

$Forfeiture\quad Amount=200shares \times Rs5= Rs1000$

$Forfeiture\quad Amount\quad for\quad 100share= 100shares \times Rs5= Rs500$

$Forfeiture\quad amount\quad on\quad reissue=100shares \times Rs2=200$

Profit on the reissue is the profit earned by the company when the forfeited shares are reissued

$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture-Forfeited\quad amount\quad on\quad reissue$

Substitute the values in the above equation

$Profit\quad on\quad reissue= Rs500-Rs200= Rs300$

Hence, the profit earned on the reissue of shares is Rs $300$ .

Share Forfeiture a/c Dr. Rs300

To share capital a/ Rs300.

L Ltd. forfeited 10 shares of Rs 10 each (Rs 6 called up) issued at a discount of 10% to Y on which he had paid an application money of Rs 2 per share. If 8 of these shares were re-issued as Rs 8 called up for Rs 8 per share, the profit on re-issue is-

0%
Rs 20,
0%
Rs 16,
0%
Rs 12,
0%
Rs 8,

Explanation

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

$Forfeiture\quad Amount=Application\quad Amount\quad$

Substitute the values in above equation

$Forfeiture\quad Amount=Rs2$

Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.

$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$

Substitute the values in the above equation

$Forfeiture\quad Amount=10shares \times Rs2= Rs20$

$Forfeiture\quad Amount\quad for\quad 8shares=8shares \times Rs2=Rs16$

$Forfeiture\quad Amount\quad on\quad reissue=\quad 8shares\quad \times \quad Rs0\quad =\quad Rs0\\$

Profit on the reissue is the profit earned by the company when the forfeited shares are reissued

$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture$

Substitute the values in the above equation

$Profit\quad on\quad reissue=Rs16-Rs0 = Rs16$

Hence, the profit earned on the reissue of shares is Rs $16$ .

M Ltd. forfeited 10 shares of Rs 10 each (Rs 6 called up) issued to Y on which he had paid an application money of Rs 2 per share. If 8 of these shares were re-issued as Rs 8 called up for Rs 7.50 per share, the profit on re-issue is-

0%
Rs 20
0%
Rs 16
0%
Rs 12
0%
Rs 8

Explanation

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

$Forfeiture\quad Amount=Application\quad Amount\quad$

Substitute the values in above equation

$Forfeiture\quad Amount=Rs2$

Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.

$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$

Substitute the values in the above equation

$Forfeiture\quad Amount=10shares \times Rs2= Rs20$

$Forfeiture\quad Amount\quad for\quad 8shares=8shares \times Rs2=Rs16$

$Forfeiture\quad Amount\quad on\quad reissue=\quad 8shares\quad \times \quad Rs0\quad =\quad Rs0\\$

Profit on the reissue is the profit earned by the company when the forfeited shares are reissued

$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture$

Substitute the values in the above equation

$Profit\quad on\quad reissue=Rs16-Rs0 = Rs16$

Hence, the profit earned on the reissue of shares is Rs $16$ .

J Ltd. forfeited 50 shares of Rs 100 each issued at 10% premium (to be paid at the time of allotment) on which first call of Rs 30 per share was not received, the second & final call of Rs 20 per share was not yet called. If 20 of these shares were re-issued at Rs 50 per share as fully paid-up, the Profit on re-issue is-

0%
Rs 2,500,
0%
Rs 2,300,
0%
Rs 1,500,
0%
None of these

Explanation

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

$Forfeiture\quad Amount=Application\quad Amount\quad +\quad Allotment\quad Amount$

Substitute the values in the above equation

$Forfeiture\quad Amount=Rs30\quad +\quad Rs30\quad =\quad Rs60$

Forfeiture amount is the money received by the company on forfeiture (cancellation of share) or on the reissue of share.

$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$

Substitute the values in the above equation

$Forfeiture\quad Amount=50shares \times Rs60= Rs3,000$

$Forfeiture\quad Amount\quad for\quad 20shares=20shares \times Rs60=Rs1200$

$Forfeiture\quad Amount\quad on\quad reissue=\quad 20shares\quad \times \quad Rs50\quad =\quad Rs1000\\$

Profit on the reissue is the profit earned by the company when the forfeited shares are reissued

$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture$

Substitute the values in the above equation

$Profit\quad on\quad reissue=Rs1200-Rs 1000=Rs200$

Hence, the profit earned on the reissue of shares is Rs $200$

Share forfeiture a/c $Dr. Rs200$

To capital reserve a/c $Rs200$

Q Ltd. forfeited 10 shares of Rs 10 each (Rs 6 called up) issued at a discount of 10% to Y on which he had paid an application money of Rs 2 per share. If 8 of these shares were re-issued as fully paid-up Rs 7 per share, the Profit on re-issue is-

0%
Rs 20,
0%
Rs 16,
0%
Rs 12,
0%
None of these

Explanation

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

$Forfeiture\quad Amount=Application\quad Amount$

Substitute the values in above equation

$Forfeiture\quad Amount=Rs2$

Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.

$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$

Substitute the values in the above equation $Forfeiture\quad Amount=10shares \times Rs2= Rs20$

$Forfeiture\quad Amount\quad for\quad 8share= 8shares \times Rs2= Rs16$

$Forfeiture\quad amount\quad on\quad reissue=8shares \times Rs2=Rs16$

Profit on the reissue is the profit earned by the company when the forfeited shares are reissued

$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture$

Substitute the values in the above equation

$Profit\quad on\quad reissue= Rs16-Rs16= Rs0$

Hence, the profit earned on the reissue of shares is Rs $00$ .

A limited company forfeited 300 shares of Mr. X who had applied for 500 shares on account of non-payment of allotment money Rs 3 + 2 (premium) and first call RsOnly Rs 3 per share was received with application. Out of these 200 shares were re-issued to Mr. Y as fully paid shares for Rs 8 per share. The profit on re-issue is __________.

0%
Rs 1,500
0%
Rs 200
0%
Rs 600
0%
None of these

Explanation

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

$Forfeiture\quad Amount=Application\quad Amount$

Substitute the values in above equation

$Forfeiture\quad Amount=Rs3$

Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.

$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$

Substitute the values in the above equation

$Forfeiture\quad Amount=300 \times3= Rs900$

$Forfeiture\quad Amount\quad for\quad 200\quad shares= 200\times 3= Rs600$ .

$Forfeiture\quad Amount\quad for\quad reissued\quad shares=200\times 2= Rs400$

Profit on the reissue is the profit earned by the company when the forfeited shares are reissued

$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture- Forfeited\quad amount\quad on\quad reissue$

Substitute the values in the above equation

$Profit\quad on\quad reissue=Rs 600- Rs 400= Rs 200$

Hence, the profit earned on the reissue of shares is Rs $200$ .

Mother Ltd. forfeited 100 equity shares of Rs 10 each issued for nonpayment of first call of Rs 2 per share and the final call of Rs 3 per share on 31st March. 50 forfeited shares were re-issued as fully paid for Rs 8 per share and balance of the shares were re-issued on 30th June at Rs 7 per share. The profit on re-issue is ________.

0%
Rs 400
0%
Rs 150,
0%
Rs 100
0%
Rs 250

Explanation

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

$Forfeiture\quad Amount=Application\quad Amount$

Substitute the values in above equation

$Forfeiture\quad Amount=Rs5$

Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.

$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$

Substitute the values in the above equation $Forfeiture\quad Amount=100shares \times Rs5= Rs500$

$Forfeiture\quad amount\quad on\quad reissue=50shares \times Rs2+50shares×Rs3=Rs250$

Profit on the reissue is the profit earned by the company when the forfeited shares are reissued

$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture$

Substitute the values in the above equation

$Profit\quad on\quad reissue= Rs500-Rs250= Rs250$

Hence, the profit earned on the reissue of shares is Rs $250$ .

50 shares of Rs 10 each issued at a premium of Rs 5 each payable with allotment were forfeited for the non payment of allotment money of Rs 9 per share including premium. The first and final call on these shares at Rs 3 per share were not made. The forfeited shares were re-issued @ Rs 12 per share fully paid up. The profit on re-issue is-

0%
Rs 150,
0%
Rs 100,
0%
Rs 50,
0%
None of these

Explanation

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

$Forfeiture\quad Amount=Application\quad Amount$

Substitute the values in above equation

$Forfeiture\quad Amount=Rs3$

Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.

$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$

Substitute the values in the above equation $Forfeiture\quad Amount=50shares \times Rs3= Rs150$

$Forfeiture\quad amount\quad on\quad reissue=50shares \times Rs12=Rs600$

Profit on the reissue is the profit earned by the company when the forfeited shares are reissued

$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture$

Substitute the values in the above equation

$Profit\quad on\quad reissue= Rs150= Rs510$

Hence, the profit earned on the reissue of shares is Rs $150$ .

KMHD Ltd. forfeited 200 shares of Rs 100 each issued on which Rs 50 per share has been called and Rs 6,000 has been paid. The company then re-issued the above mentioned shares to Mr. Singh upon payment of Rs 18,000 credited as fully paid. The profit on re-issue is _________.

0%
Rs 6,000
0%
Rs 5,000
0%
Rs 4,000
0%
None of these

Explanation

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

$Forfeiture\quad Amount=Application\quad Amount$

Substitute the values in above equation

$Forfeiture\quad Amount=Rs30$

Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.

$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$

Substitute the values in the above equation $Forfeiture\quad Amount=200shares \times Rs30= Rs6000$

$Forfeiture\quad amount\quad on\quad reissue=200shares \times Rs10=Rs.2000$

Profit on the reissue is the profit earned by the company when the forfeited shares are reissued

$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture$

Substitute the values in the above equation

$Profit\quad on\quad reissue= Rs6000-Rs2000= Rs4000$

Hence, the profit earned on the reissue of shares is Rs $4000$ .

X Ltd, forfeited 20 shares of Rs 10 each, Rs 7 called up on which Mahesh had paid application and allotment money of Rs 5 per share. Of these 15 shares were re-issued to Naresh as Rs 7 paid-up for Rs 8 per share. The profit on re-issue is ________.

0%
Rs 100
0%
Rs 80
0%
Rs 75
0%
None of these

Explanation

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

$Forfeiture\quad Amount=Application\quad Amount\quad +\quad Allotment\quad Amount$

Substitute the values in above equation

$Forfeiture\quad Amount=Rs5$

Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.

$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$

Substitute the values in the above equation

$Forfeiture\quad Amount=20shares \times Rs5= Rs100$

$Forfeiture\quad Amount\quad for\quad 15shares=15shares \times Rs5=Rs75$

$Forfeiture\quad Amount\quad on\quad reissue=\quad 15shares\times Rs0\quad = Rs0\\$

Profit on the reissue is the profit earned by the company when the forfeited shares are reissued

$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture-Forfeited\quad amount\quad on\quad reissue$

Substitute the values in the above equation

$Profit\quad on\quad reissue=Rs75-Rs0 = Rs75$

Hence, the profit earned on the reissue of shares is Rs $75$ .

Share forfeiture a/c Dr Rs75

To share capital a/c Rs75.

Eee Ltd. forfeited 200 shares of Rs 10 each (Rs 8 called up) on which the holder had paid application and allotment money of Rs 5 per share. Out of these 50 shares were re-issued to F as fully paid for Rs 8 per share. The profit on re-issue is ___________.

0%
Rs 1000
0%
Rs 900
0%
Rs 150
0%
None of these

Explanation

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

$Forfeiture\quad Amount=Application\quad Amount+Allotment\quad Amount$

Substitute the values in above equation

$Forfeiture\quad Amount=Rs5$

Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.

$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$

Substitute the values in the above equation

$Forfeiture\quad Amount=200shares \times Rs5= Rs1,000$

$Forfeiture\quad Amount\quad on\quad 50shares=\quad 50shares\times Rs5\quad =Rs250$

$Forfeiture\quad amount\quad on\quad reissue=50shares \times Rs2=Rs100$

Profit on the reissue is the profit earned by the company when the forfeited shares are reissued

$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture-Forfeited\quad Amount \quad on \quad reissue$

Substitute the values in the above equation

$Profit\quad on\quad reissue= Rs250-Rs100= Rs150$

Hence, the profit on the reissue of shares is Rs $150$ .

X limited forfeited 100 shares (Rs 6 called up) issued to Mahesh on which he had paid Rs 2 per share. Out of these 80 shares were reissued at Rs 6 per share to Suresh, Rs 8 paid up. The profit on re-issue is __________.

0%
Rs 200
0%
Rs 120
0%
Rs 80
0%
Nil

Explanation

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

$Forfeiture\quad Amount=Application\quad Amount$

Substitute the values in above equation

$Forfeiture\quad Amount=Rs2$

Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.

$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$

Substitute the values in the above equation $Forfeiture\quad Amount=100shares \times Rs2= Rs200$

$Forfeiture\quad Amount\quad for\quad 80share= 80shares \times Rs2= Rs160$

$Forfeiture\quad amount\quad on\quad reissue=80shares \times Rs2=Rs160$

Profit on the reissue is the profit earned by the company when the forfeited shares are reissued

$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture$

Substitute the values in the above equation

$Profit\quad on\quad reissue= Rs160-Rs160= Nil$

Hence, the profit earned on the reissue of shares is $Nil$ .

1000 shares of Rs 10 each issued at par were forfeited for the non payment of the final call of Rs 2 per share. These shares were re-issued @ Rs 8 per share fully paid up. The profit on re-issue is _________.

0%
Rs 8,000
0%
Rs 6,000
0%
Rs 4,000
0%
None of these

Explanation

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

$Forfeiture\quad Amount=Application\quad Amount+Allotment\quad Amount$

Substitute the values in above equation

$Forfeiture\quad Amount=Rs8$

Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.

$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$

Substitute the values in the above equation

$Forfeiture\quad Amount=1000shares\times Rs8= Rs8,000$

$Forfeiture\quad amount\quad on\quad reissue=1000sahres \times Rs2=Rs2,000$

Profit on the reissue is the profit earned by the company when the forfeited shares are reissued

$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture+Forfeited\quad Amount \quad on \quad reissue$

Substitute the values in the above equation

$Profit\quad on\quad reissue= Rs8,000-Rs2,000= Rs6,000$

Hence, the profit n reissue is Rs $6,000$ .

Dee Ltd. forfeited 160 shares of Rs 10 each on which the holder has paid only the application money of Rs 2 per share. Out of these, 40 shares we re-issued to 'E' as fully paid for Rs 9 per share. The profit on re-issue is _______.

0%
Rs 320
0%
Rs 160
0%
Rs 40
0%
None of these

Explanation

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

$Forfeiture\quad Amount=Application\quad Amount+Allotment\quad Amount$

Substitute the values in above equation

$Forfeiture\quad Amount=Rs2$

Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.

$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$

Substitute the values in the above equation

$Forfeiture\quad Amount=160shares \times Rs2= Rs320$

$Forfeiture\quad Amount\quad on\quad 40shares=\quad 40shares\times Rs2\quad =Rs80$

$Forfeiture\quad amount\quad on\quad reissue=40shares \times Rs1=Rs40$

Profit on the reissue is the profit earned by the company when the forfeited shares are reissued

$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture-Forfeited\quad Amount \quad on \quad reissue$

Substitute the values in the above equation

$Profit\quad on\quad reissue= Rs80-Rs40= Rs40$

Hence, the profit on the reissue of shares is Rs $40$ .

AH Ltd. forfeited 500 shares of Rs 10 each on which first call of Rs 3 per share was not received, the second and final call of Rs 2 per share has not yet been called. Out of these 125 shares were re-issued to I as Rs 8 paid-up for Rs 7 per share. The profit on re-issue is _______.

0%
Rs 2,500
0%
Rs 2,375
0%
Rs 500
0%
None of these

Explanation

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

$Forfeiture\quad Amount=Application\quad Amount\quad +\quad Allotment\quad Amount$

Substitute the values in above equation

$Forfeiture\quad Amount=Rs5$

Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.

$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$

Substitute the values in the above equation

$Forfeiture\quad Amount=500shares \times Rs5= Rs2500$

$Forfeiture\quad Amount\quad for\quad 125shares=125shares \times Rs5=Rs625$

$Forfeiture\quad Amount\quad on\quad reissue=\quad 125shares\quad \times \quad Rs1\quad = Rs125\\$

Profit on the reissue is the profit earned by the company when the forfeited shares are reissued

$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture$

Substitute the values in the above equation

$Profit\quad on\quad reissue=Rs625-Rs125 = Rs500$

Hence, the profit earned on the reissue of shares is Rs $500$ .

100 shares of Rs 100 each issued were forfeited for the non payment of allotment money of Rs 50 per share. The first and final call on these shares at Rs 20 per share were not made. The forfeited shares were re-issued for Rs 7,000 fully paid up. The profit on re-issue is-

0%
Rs 2,000
0%
Rs 1,000
0%
Nil
0%
None of these

Explanation

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

$Forfeiture\quad Amount=Application\quad Amount$

Substitute the values in above equation

$Forfeiture\quad Amount=Rs30$

Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.

$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$

Substitute the values in the above equation

$Forfeiture\quad Amount=100shares \times Rs30= Rs3000$

$Forfeiture\quad amount\quad on\quad reissue=100shares \times Rs30=Rs3000$

Profit on the reissue is the profit earned by the company when the forfeited shares are reissued

$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture$

Substitute the values in the above equation

$Profit\quad on\quad reissue= Rs3000-Rs3000= Rs0$

Hence, the profit earned on the reissue of shares is Rs $0$ .

G Ltd. acquired assets worth Rs.

$75,000$ from H Ltd. By issue of share of Rs.

$10$ at a premium of Rs.

$5$ . The number of shares to be issued by G Ltd. to settle the purchase consideration _________.

0%
$6,000$ shares
0%
$7,500$ shares
0%
$9,375$ shares
0%
$5,000$ shares

The Amount of capital that is mentioned in capital clause is known as _________.

0%
Authorised Capital
0%
Registered Capital
0%
Nominal Capital
0%
All of these

MIG Ltd, forfeited 10 shares of Rs 10 each (Rs 6 called up) issued to Mr. Y on which he had paid an application money of Rs 2 per share. Out of these, 8 shares were re-issued to Z as Rs 8 called up for Rs 9 per share. The profit on re-issue is _________.

0%
Rs 20
0%
Rs 18
0%
Rs 16
0%
None of these

Explanation

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

$Forfeiture\quad Amount=Application\quad Amount\quad +\quad Allotment\quad Amount$

Substitute the values in above equation

$Forfeiture\quad Amount=Rs2$

Forfeiture amount is the money received by the company on forfeiture (cancellation of share) or on the reissue of share.

$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$

Substitute the values in the above equation

$Forfeiture\quad Amount=10shares \times Rs2= Rs20$

$Forfeiture\quad Amount\quad for\quad 8shares=8shares \times Rs2=Rs16$

$Forfeiture\quad Amount\quad on\quad reissue=\quad 8shares\times Rs0\quad = Rs0\\$

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.

Profit on the reissue is the profit earned by the company when the forfeited shares are reissued

$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture\quad -\quad Forfeited\quad Amount\quad on\quad Reissue$

Substitute the values in the above equation

$Profit\quad on\quad reissue=Rs16-Rs0 = Rs16$

Hence, the profit earned on the reissue of shares is Rs $16$ .

Share forfeiture a/c Dr. Rs16

To share forfeiture a/c Rs16.

Y Ltd, forfeited 100 shares of Rs 100 each issued at 20% premium (to be paid at the time of allotment) for non-payment of a first call of Rs 30 per share and a second & final call of Rs 20 per share. Out of these 40 shares were re-issued as fully paid-up for Rs 90 per share. The profit on re-issue is _________.

0%
Rs 7,000
0%
Rs 5,000
0%
Rs 1,600
0%
None of these

Explanation

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

$Forfeiture\quad Amount=Application\quad Amount\quad +\quad Allotment\quad Amount$

Substitute the values in above equation

$Forfeiture\quad Amount=Rs50$

Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.

$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$

Substitute the values in the above equation

$Forfeiture\quad Amount=100shares \times Rs50= Rs5,000$

$Forfeiture\quad Amount\quad for\quad 40shares=40shares \times Rs50=Rs2,000$

$Forfeiture\quad Amount\quad on\quad reissue=\quad 40shares\times Rs10\quad = Rs400\\$

Profit on the reissue is the profit earned by the company when the forfeited shares are reissued

$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture\quad -\quad Forfeited\quad Amount\quad on\quad Reissue$

Substitute the values in the above equation

$Profit\quad on\quad reissue=Rs2,000-Rs400 = Rs1,600$

Hence, the profit earned on the reissue of shares is Rs $1,600$ .

Y Ltd. forfeited 40 shares of Rs 10 each issued at a premium of 40% to Mr. Ramesh who had applied for 48 shares. After having paid Rs 6 (including Rs 2 premium), he did rot pay allotment money of Rs 2 (including Re 1 premium) and on his subsequent failure to pay the first call of Rs 3 (including Re 1 premium) his shares were forfeited. The amount to be credited to Forfeited Shares Account is _______.

0%
Rs 288
0%
Rs 200
0%
Rs 192
0%
Rs 160

Explanation

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

$Forfeiture\quad Amount\quad=Application\quad per\quad share$

Substitute the values in the above equation

$Forfeiture\quad Amount\quad =Rs6$

Forfeiture amount is the money received by the company on forfeiture (cancellation of share) or on the reissue of share.

$Total\quad share\quad forfeiture\quad Amount\quad =\quad Shares\quad forfeited\quad \times \quad Forfeiture\quad amount\quad$

Substitute values in the above equation

$Total\quad share\quad forfeiture\quad Amount\quad =\quad 48shares\times Rs6\\ \quad =Rs288\quad \quad$

Thus, the amount to be credited to share forfeiture account is $Rs288$ while shares are being forfeited or canceled.

X Ltd. forfeited 100 shares of Rs 10 each (Rs 8 called up) issued at a premium of 2 per share to Mr. R for non-payment of allotment money of Rs 5 per share (including premium). Out of these 70 shares were re-issued to Mr. Sanjay as Rs 8 called up for Rs 10 per share. The profit on re-issue is-

0%
Rs 500
0%
Rs 400
0%
Rs 350
0%
None of these

Explanation

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

$Forfeiture\quad Amount=Application\quad Amount\quad +\quad Allotment\quad Amount$

Substitute the values in above equation

$Forfeiture\quad Amount=Rs5$

Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.

$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$

Substitute the values in the above equation

$Forfeiture\quad Amount=100shares \times Rs5= Rs500$

$Forfeiture\quad Amount\quad for\quad 70shares=70shares \times Rs5=Rs350$

$Forfeiture\quad Amount\quad on\quad reissue=\quad 7shares\times Rs0\quad = Rs0\\$

Profit on the reissue is the profit earned by the company when the forfeited shares are reissued

$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture\quad -\quad Forfeited\quad Amount\quad on\quad Reissue$

Substitute the values in the above equation

$Profit\quad on\quad reissue=Rs350-Rs0 = Rs350$

Hence, the profit earned on the reissue of shares is Rs $350$ .

A Public Co. can have a minimum of _________ members.

0%
Any number
0%
Seven
0%
Twenty
0%
Fifty

Z Ltd. forfeited 200 shares of Rs 100 each, issued at 10% premium for non-payment of allotment money of Rs 50 per share (including premium), first call of Rs 40 per share and a second and final call of Rs 10 per share. Out of these 80 shares were re-issued as fully paid-up for Rs 95 per share. The profit on re-issue is __________.

0%
Rs 2,000
0%
Rs 1,600
0%
Rs 400
0%
None of these

Explanation

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

$Forfeiture\quad Amount=Application\quad Amount\quad +\quad Allotment\quad Amount$

Substitute the values in above equation

$Forfeiture\quad Amount=Rs10$

Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.

$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$

Substitute the values in the above equation

$Forfeiture\quad Amount=200shares \times Rs10= Rs2,000$

$Forfeiture\quad Amount\quad for\quad 80shares=80shares \times Rs10=Rs800$

$Forfeiture\quad Amount\quad on\quad reissue=\quad 80shares\times Rs5\quad = Rs400\\$

Profit on the reissue is the profit earned by the company when the forfeited shares are reissued

$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture\quad -\quad Forfeited\quad Amount\quad on\quad Reissue$

Substitute the values in the above equation

$Profit\quad on\quad reissue=Rs800-Rs400 = Rs400$

Hence, the profit earned on the reissue of shares is Rs $400$ .

Share forfeiture a/c Dr. Rs400

To share capital a/c Rs400.

MIG Ltd. forfeited 80 shares of Rs 10 each, issued for non-payment of first call of Rs 2 per share. The second and final call of Rs 3 per share has not yet been called. Out of these, 20 shares were re-issued as Rs 7 paid-up for Rs 5 per share. The profit on re-issue is _________.

0%
Rs 320
0%
Rs 280
0%
Rs 60
0%
None of these

Explanation

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

$Forfeiture\quad Amount=Application\quad Amount\quad +\quad Allotment\quad Amount$

Substitute the values in above equation

$Forfeiture\quad Amount=Rs5$

Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.

$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$

Substitute the values in the above equation

$Forfeiture\quad Amount=80shares \times Rs5= Rs400$

$Forfeiture\quad Amount\quad for\quad 20shares=20shares \times Rs5=Rs100$

$Forfeiture\quad Amount\quad on\quad reissue=\quad 20shares\times Rs2\quad = Rs40\\$

Profit on the reissue is the profit earned by the company when the forfeited shares are reissued

$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture\quad -\quad Forfeited\quad Amount\quad on\quad Reissue$

Substitute the values in the above equation

$Profit\quad on\quad reissue=Rs100-Rs40 = Rs60$

Hence, the profit earned on the reissue of shares is Rs $60$ .

_______ is to be executed on a non judicial stamp paper.

0%
Share warrant
0%
Power of attorney
0%
Incorporation certificate
0%
None of the above

Asha Ltd, issued shares of Rs.

$100$ each at a premium of

$25\%$ mamta who has Rs.

$2,000$ shares of Asha ltd. Failed Rs.

$5$ . Premium was taken at the company. On forfeiture of Mamta's shares, the amount to be debited to share Premium account will be.

0%
Rs. $5000$
0%
Rs. $10,000$
0%
Rs. $15,000$
0%
Nil

Right shares are issued to ________.

0%
Promoters for the services
0%
Holders of convertible debentures
0%
Existing shareholders
0%
All of the above

When full amount is due on any call but it is not received, then the shortfall is debited to ________.

0%
Calls in advance
0%
Calls in arrear
0%
Share capital
0%
Suspense account

The difference between Subscribed Capital and Called-up Capital is called _________.

0%
Calls-in-arrear
0%
Calls-in-advance
0%
Uncalled capital
0%
None of the above

Voluntary return of shares for cancellation by the shareholders is called _______.

0%
Surrender of shares
0%
Forfeiture
0%
Cancellation of share
0%
Distribution of shares

At the time of forfeiture, share capital Account is debited with ________.

0%
Face Value
0%
Nominal Value
0%
Paid up Value
0%
Called up Value

A company forfeited

$100$ equity shares of Rs.

$100$ each issued at premium of

$50\%$ (to be paid at the time of allotment) on which the first call money of Rs.

$30$ per share was not received, final call Rs.

$20$ is yet to be made. These shares were subsequently reissued

$@$ Rs.

$70$ per share at Rs.

$80$ paid up. The amount credited to capital reserve is?

0%
$4000$
0%
$2000$
0%
$3000$
0%
None

Explanation

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

$Forfeiture\quad Amount=Application\quad Amount$

Substitute the values in above equation

$Forfeiture\quad Amount=Rs50$

Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.

$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$

Substitute the values in the above equation $Forfeiture\quad Amount=100shares \times Rs50= Rs5000$

$Forfeiture\quad amount\quad on\quad reissue=100shares \times Rs10=Rs1000$

Profit on the reissue is the profit earned by the company when the forfeited shares are reissued

$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture$

Substitute the values in the above equation

$Profit\quad on\quad reissue= Rs5000-Rs1000= Rs4000$

Hence, the profit earned on the reissue of shares is Rs $4000$ and credited to capital reserve account.

Reserve share capital means ____________.

0%
Part of authorized capital to be called at beginning
0%
Portion of uncalled capital to be called only at liquidation
0%
Over subscribed capital
0%
Under subscribed capital

A company issued

$5,000$ shares of Rs.

$10$ each at

$20\%$ premium payable as follows: Application- Rs.

$2$ , allotment Rs.

$5$ (including premium) and first and Final Call Rs.

$5$ . A holder of

$200$ shares failed to pay the first and final call. His shares were forfeited. Calculate the amount to be credited to share Forfeiture Account.

0%
Rs. $1,000$
0%
Rs. $1,400$
0%
Rs. $400$
0%
None of these

Explanation

When a shareholder doesn't pay up the called up value, his shares are forfeited and the amount is credited to forfeiture account at the time of forfeiture.

$Forfeiture\quad Amount=\quad Application\quad amount+Allotment\quad amount$

Substitute values in the above equation

$Forfeiture\quad Amount=\quad Rs2+Rs3\quad =Rs5$

$Forfeiture\quad Amount\quad to\quad be\quad credited=\quad Shares\quad forfeited\times Forfeiture\quad amount$

Substitute values in the above equation

$Forfeiture\quad Amount\quad to\quad be\quad credited=\quad 200shares\times Rs5\quad =\quad Rs1,000$ .

A Ltd. Acquired assets worth Rs.

$11,25,000$ from B. Ltd. by issue of equality shares of Rs.

$100$ at premium of

$25\%$ . The number of shares to be issued by A Ltd, for the purchase consideration.

0%
$9000$ shares
0%
$11250$ shares
0%
$14063$ shares
0%
$7500$ shares

Explanation

The equity shares benefits a company with issue of such as purchase consideration, that is, purchase of assets.

$Market\quad Value\quad of\quad share=\quad Face\quad value+Premium$

Substitute values in the above equation

$Market\quad Value\quad of\quad share=\quad Rs100+Rs25\quad =Rs125$

$Number\quad of\quad shares=\quad \cfrac { Purchase\quad value }{ Market\quad value\quad of\quad share }$

Substitute values in the above equation

$Number\quad of\quad share=\quad \cfrac { Rs11,25,000 }{ Rs125 } \quad =9,000shares$ .

When shares are issued at a premium and the amount is already received by company. Later on, when such shares are forfeited.

0%
Premium A/c should be debited
0%
Premium A/c should be credited
0%
Premium A/c is not affected
0%
None of these

Which of the following should be deducted from the share capital to find out paid up capital of a company?

0%
Calls in advance
0%
Calls in arrear
0%
Share forfeiture
0%
Discount on issue of shares

If a shares of Rs.

$10$ on which Rs.

$8$ has been paid up is forfeited, it can be re-issued at the minimum price of ______.

0%
Rs. $10$ per share
0%
Rs. $8$ per share
0%
Rs. $5$ per share
0%
Rs. $2$ per share

The O and M staff also helps other departments in the implementation of their _____________ .

0%
Ideas
0%
Ideologies
0%
Plans
0%
Programmes

Consider the following statements:
Redeemable preference shares of a company can be redeemed out of
Profits of the company which would otherwise be available for dividend.
Company's share premium account.
3.Fresh issue of shares made for the purpose of redemption.
Which of the above statements are correct?

0%
1 and 2
0%
1 and 3
0%
2 and 3
0%
1, 2 and 3

The balance appearing in books of a company at the end of year were: CRR A/c Rs.

$50,000$ , Security Premium. Rs.

$5,000$ . Revaluation Reserve Rs.

$20,000$ , P & L A/c(Dr.) Rs.

$10,000$ . Maximum amount available distribution of Bonus shares will be ________.

0%
Rs. $50,000$
0%
Rs. $55,000$
0%
Rs. $45,000$
0%
Rs. $57,000$

Explanation

Bonus shares are issued when the company has sufficient cash to pay the shareholders with their regular dividends. The shareholders can sell these shares and meet their cash needs. Firstly the company uses its reserves to pay off the dividend and the reserve balance can be calculated as under:

$Amount\quad in\quad reserves\quad =\quad CRR+Revaluation\quad reserve-Security\quad premium-P/l\quad balance$

Substitute values in the above equation

$Amount\quad in\quad reserves\quad =\quad Rs50,000+Rs20,000-Rs5,000-Rs10,000\quad =Rs55,000$

Thus, the company has Rs55,000 in its reserves to meet the expense during the issue of bonus shares.

Z & Co. forfeited

$100$ shares of Rs.

$10$ each for non-payment of final call of Rs.

$2$ per shares. All shares were reissued at Rs.

$9$ per share. What amount will be transferred to Capital reserve A/c?

0%
Rs. $700$
0%
Rs. $800$
0%
Rs. $900$
0%
Rs. $1000$

Explanation

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

$Forfeiture\quad Amount=Application\quad Amount+Allotment\quad Amount$

Substitute the values in above equation

$Forfeiture\quad Amount=Rs8$

Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.

$Forfeiture\quad Amount= No.\quad of\quad shares \times Forfeiture\quad Amount$

Substitute the values in the above equation

$Forfeiture\quad Amount=100shares \times Rs8= Rs800$

$Forfeiture\quad amount\quad on\quad reissue=100shares \times Rs1=Rs100$

Profit on the reissue is the profit earned by the company when the forfeited shares are reissued and transferred to capital reserve account

$Profit\quad on\quad reissue=Forfeited\quad Amount\quad on\quad forfeiture+Forfeited\quad Amount \quad on \quad reissue$

Substitute the values in the above equation

$Profit\quad on\quad reissue= Rs800-Rs100= Rs700$

Hence, the amount credited to capital reserve accountis Rs $700$ .

A company forfeited

$2000$ shares of Rs.

$10$ each (which were issued at par) held by Mr. John for non-payment of allotment money of Rs.

$4$ per share. The called up value per share was Rs.

$9$ . On forfeiture, the amount debited to share capital will be ___________.

0%
Rs. $10,000$
0%
Rs. $8,000$
0%
Rs. $2000$
0%
Rs. $18,000$

Explanation

The company debits a certain amount to the share capital at the time of forfeiture of shares which is always the called up value. And the called up value is that amount which any company demands from its shareholders periodically every year.

The share capital is debited because the called up amount which the company was expecting from was shareholders has not been deposited and thus they have to reduce the capital balance by debiting share capital account.

Share capital amount can be calculated as under:

$Share\quad Capital\quad Amount=\quad Called\quad up\quad value\quad per\quad share\times No.\quad of\quad shares\quad$

Substitute values in the above equation

$Share\quad Capital\quad Amount=\quad Rs9\times 2000shares\quad =Rs18,000$

The amount debited to share capital is

$Rs18,000$ .

______ is an acknowledgement of debt under common seal of a company.

0%
Share
0%
Debenture
0%
Cheque
0%
Bond

Dividend is paid on _______________.

0%
Authorised capital
0%
Issued capital
0%
Subscribed capital that is paid
0%
None of the above

CBSE Questions for Class 12 Commerce Accountancy Accounting For Share Capital Quiz 10 - MCQExams.com

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Practice Class 12 Commerce Accountancy Quiz Questions and Answers

CBSE Questions for Class 12 Commerce Accountancy Accounting For Share Capital Quiz 10 - MCQExams.com

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Practice Class 12 Commerce Accountancy Quiz Questions and Answers

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