A company forfeited 200 shares of Rs. 10 each fully called up foe non - payment of first call of Rs. 3 per shares. 120 of these shares

Question

A company forfeited 200 shares of Rs. 10 each fully called up for non – payment of first call of Rs. 2/- per share and final call of Rs. 3 per share. 120 of these shares were reissued at Rs. 6/- per share fully paid up. Give the necessary entries.

Answer 1

Calculation of Amount Transfer to Capital Reserve: 

No of shares x (Reissue price – paid up amount) 

120 x (6 – 5) 

= 120 x 1 

= Rs. 120.