On January 1, 2024, the Director of X Ltd. issued for public subscription 50,000 equity shares of Rs. 10 each at Rs. 12 per share payable, Rs. 5 on application (including premium), Rs. 4 on allotment and the balance on call on May 01, 2024. The issue was closed on February 10, 2024 by which date applications for 70,000 shares were received. Of the cash received Rs. 40,000 was returned and Rs. 60,000 was applied to the amount due on allotment, the balance of which was paid on February 16, 2024. All the shareholders paid the call due on May 01, 2024 with the exception of an allottee of 500 shares. These shares were forfeited on September 29, 2024 and reissued as fully paid at Rs. 8 per share on November 01, 2024. The company, as a matter of policy, does not maintain a calls-in-arrears account.What is the amount of Profit on reissue of Forfeited Shares Accounts transferred to capital reserve?
- ARs. 500
- BRs. 1000
- CRs. 2000
- DRs. 2500
Solution & Step-by-step Explanation
Let's calculate the values step by step:Find the call money per share:Total Share Face Value = Premium value added = (Total Issue Price = )Application Stage Cost = Principal Premium Allotment Stage Cost = Balance due on final call = $
\text{Rs. } 3 \text{Application Principal } (\text{Rs. } 3) + \text{Allotment } (\text{Rs. } 4) = \text{Rs. } 7 500 \text{ shares} \times \text{Rs. } 7 = \text{Rs. } 3,500 \text{Rs. } 10 \text{Rs. } 8 10 - 8 = \text{Rs. } 2 500 \times 2 = \text{Rs. } 1,000 $
\text{Rs. } 3 \text{Application Principal } (\text{Rs. } 3) + \text{Allotment } (\text{Rs. } 4) = \text{Rs. } 7 500 \text{ shares} \times \text{Rs. } 7 = \text{Rs. } 3,500 \text{Rs. } 10 \text{Rs. } 8 10 - 8 = \text{Rs. } 2 500 \times 2 = \text{Rs. } 1,000 $