Login

Can anyone explain how to calculate capital reserve amount when all forfeited shares are not reissued?

When shares are forfieted, the amount credited to the Share Forfieted A/c (while passing the entry for forfieture) is in respect of all the shares forfieted.

.

Later on, if all of the shares are not re-issued, calculation should made only in respect of the shares actually re-issued.

.

For example, if only 70% of the shares forfieted is re-issued, then compare the amount credited to the Share Forfieted A/c for these 70% of the shares with the amount debited while passing the entry for re-issue.

.

After re-issue, the balance in the Share Forfieted A/c will be in respect of the remaining 30% of the forfieted shares, i.e. those shares which have not been re-issued.

.

.

Conclusion: The profit or loss on the re-issue of the shares can be only in respect of the shares which are re-issued. So, don't consider the shares not re-issued for the above calculation.

  • 8
View Full Answer
Formula for the amount to be transferred to Capital Reserve
.
.
Amount Received On Forfeited Shares(Share Forfeiture A/C) divided by No. of forfeited shares multiplied by No. of reissued shares less Loss on Reissue

Mathematically,
Amount Received On Forfeited Shares(Share Forfeiture A/C)
÷
No. of forfeited shares
×
No. of reissued shares
-
Loss on Reissue
  • 27
1st suppose 1000 shares were forfeited and only 500 r reisuued then..500*the forfeited amt say 2000/1000=1000....then in the reissue entry subtract it ONLY by forfeited discount amnt then t/f to reserve...and if sec.prem is there then direct transfer whole of 1000rs in capital reserve
  • 4
In such  questions , a simple method, may be like given below:-
calculation the amount of capital reserve :-
Suppose  400  shares are from group (A) applyping  for 10000 shares but were alloted 8000 shares on which applicant paid RS.2/- per share on application  of 500 shares. It means that applicant has paid 500x2=1000 on application but could not pay allotment money of RS.3/- per share. his shares were forfeited immediately after allotment.Therefore his whole money of RS 1000 will be forfeited. It means he has actually paid Rs. 2.50 per share and not Rs.2/- per share. If out of these shares 300 shares  were re issued at 9 per share as fully paid up. the discount given on one share is Re.1/-  but we have Rs. 2.50/- per share in forfeited a/c.Thus 2.50-1=1.50 per share will be transferred to capital reserve. Total amounted transferred to capital reserve will be 300x1.50=450/-
  • -3
Jjjjhg
  • -9
(Forfeited profit ? no. Of re issue shares less forfeieted? no. Of forfeited shares )- re issue loss
  • -4
Distribute reserve in all patners in there all psr
  • -1
Answer of ts
  • -2
The answer of amount received on allotment is rs 9016 and not 9000
  • -2
amount for capital reserve is calculated after reissue of forfeited shares because loss of shares at the time of reissue can be identified after reissue only. Amount of capital reserve will be transferred in balance sheet only after reissue
  • -1
Formula--: no.of share forfeited?paid amt.?no.of share reissued/no.of share forfeited-discounted forfetied shares amt.
  • 2
Students if u like my answer and need more explaination then please contact me on 8949379601

  • -4
For more help contact me on 8949379601

  • 7
In this case see how many shares were forfeited (say 1000)and amount forfeited against these shares(say 5000)..Now calculate loss (if any) on reissue of shares (say 800) which is debited to.share forfeiture account (say 2500) Now calculate forfeited amount for the reissued shares (5000?1000?800 = 4000) against which.we have loss of 2500...So entrywill be share forfeiture Dr. 1500 to capital Reserve Cr. 1500
  • -2
Please find this answer

  • -2
The method is..
1. The share forfeited amount in the entry in forfeited shared which is credited will be deducted with the share forfeited amount in the entry of the reissue which is debited.
  • 2
Dear Jyoti ,first of all when shares are forfeited and after forfeiture , shares are reissued then we.do the.entry of capital reserve in which forfeited shares are transferred .
  • -2
U can find out capital reserve by using formulamentioned in picture.

  • -2
ertuy6
  • 2
Please find this answer

  • 4
Please find this answer

  • 0
I agree
  • 0
Machinery purchased from Rahul of @1000
  • 1
No. Of shares reissue / No. Of shares forfeited * amount of share forfeiture -amount of share forfeiture used
  • 2
Total forfeited amount/total no. Of share forfeited?no. Of share reissue or no issued
  • 2
(Total amount forfeited / no of share forfeited ? no of share reissued )-
Reisuee discount (if any)
  • 1
Question no. 43 from the t.s grewal
  • 1
There is no need to transfer the forfeited amount to capital reserves
  • 3
Credit balance of forfited share divided by number of shares forfited multiple by number of shares reissued.
  • 1
Forfeited amount ?no of shares reissued %by no of shares allotted
  • 1
Calculate proportionate amount of forfeiture on reissued shares

Deduct the loss on reissued that is debited to forfeiture account if any

Transfer the balance to capital reserve.

you have forfeited 500 shares and forfeiture account is credited with 2000.

If you have reissued all shares for 9 rs fully paid up than there is loss of 500 on reissued.

1500 will be transferred to capital reserve
  • 1
Yes
When all forfeited shares are not reissued then all the amount forfeited is transferred to capital reserve
  • 1
abcds
  • 1
all amount of forfeited shares get tranter to capital reserve and this will be the final answer
  • 2
Firstly Find the forfeiture amount of reissued shares and then deduct the amount of forfeiture (in reissue of shares) from the forfeiture amount (calculated previous one)
  • 1
The amount of share forfeited xxx
The amount of share reissued xxx
  • 1
It is very simple
  • 0
please post your question clearly so that I can understand it and tell it to you.
  • 0
It's called partial Reissue
To find capital Reserve, use this formula
Amount Received during forfeiture/ forfeited shares * reissued shares
  • 1
Firstly calculate the forfeiture amount of the shares( number of reissued shares). And deduct the forfeiture amount i.e., in the entry of reissue from the amount which has been calculated first one.

For example:
You have forfeited 500 shares and its forfeiture amount is 2000. And u r reissuing only 250 shares. So find the forfeiture amount of 250 shares and that will be 1000 i.e., 2000/500*250.
And suppose the forfeiture amount in the entry of reissue of shares is 700. To calculate the capital reserve deduct 700 from 1000.so 300 will be the capital reserve..
  • 1
Format of balance sheet

  • 0
Total reissued shares devided by total no. Of shares (share forfeiture1 -share forfeiture2)
  • 0
capital reserve in that case is not created. amt of forfeited shares ac is transferred to share capital
  • 0
The and will be nil
  • 0
Chapter 2 ka EX 2.2 Q no 3 ka(d) shamagh me nahi aaya
  • 0
U can read this

  • 2
Ans: 1) shares capital ?44000 2) shares capital ? 40000 , securities premium reserve ? 4000

  • 0
Z Ltd. Purchase a machinery from neeraj traders worth ? 44000 which payment made by shares of ? 10 each.
Make journal entries in the following conditions: (1) when shares issued at par (2) when shares issued at 10% premium.
[Ans. (1) shares capital ? 44,000 (2) shares capital ? 40,000,securities premium reserve ? 4,000]
  • 0
Please find this answer

  • 0
may be in this case share forfeiture amt transfer to reserve capital account
  • 0
Its done by dividing the total amount of forfeiture by total no.of shares and then multiply it with the no of shares reissued
  • 0
okkkkk
  • 0
By finding per share amount wrt to the amount in share forfeiture.Then calculate loss on reissue(1)after finding calculate the amount of money available for discount of shares(2)(wrt the no of shares forfeited) subtract both (1)-(2) then you will find the profit on reissue (ie) the amount transferred to capital reserve.
  • 0
Amount Received On Forfeited Shares(Share Forfeiture A/C) divided by No. of forfeited shares multiplied by No. of reissued shares less Loss on Reissue.

But Mathematically,
Amount Received On Forfeited Shares(Share Forfeiture A/C)
?
No. of forfeited shares
?
No. of reissued shares
-
Loss on Reissue
  • 0
profit on forfeited shares ? no. of forfeited shares ? no. of shares reissued - loss on reissue of shares
  • 0
(Amount forfeited ? no. Of shares reissued /total no. Of share forfeited) - amount used in reissue of shares
  • 0
Value of SHares Forfeitured-Discount (if any)
  • 0
our company sold to its plant and earned a profit of rupees 10,000 amount of the company is confused to present their profit suggest when it will be show
  • 0
Please find this answer

  • 0
(Amount forfeited per share at the time of forfeiture - discount given per share at the tine of reissue)? shares reissued
  • 0
Please find this answer

  • 0
Please find this answer

  • 0
If they aren't reissued then all the amount in forfeiture account will go to capital reserve A/C
  • 0
Yes.
  • 0
What are you looking for?