A company issued shares at 20%premium. Ram applied for 1000 shares but was allotted 500 shares of this company. Find his investment, the face value of a share is Rs.100.
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A company issued shares at 20%premium. Ram applied for 1000 shares but was allotted 500 shares of this company. Find his investment, the face value of a share is Rs.100.
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Equity share capital A/c Dr(400*100) 40,000
To Share forfeiture account (400*75) 30,000
To calls in arrear account (400*25) 10,000
(Being share forfeited)
Bank A/c Dr.(300*80) 24,000
Share Forfeiture A/c Dr 6000
To Share capital A/c 30,000
(Being shares forfeited re-issued)
Shares forfeiture A/c Dr (30,000-6000) 16,500
To Capital Reserve A/c 16,500
(Being balance in share forfeiture account transferred to capital reserve
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【 rs.60,000 】
= investment on one share
= face value + premium
= 100+100×20/100
=120
= Total investment : 120 × 500
= rs .60,000
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