I have a Doubt in share forfeiture entry, sometimes in this entry the security premium received is subtracted with excess security premium received on app money and sometimes the forfeiture is subtracted with the premium received on app. The best example of this could be illustration 66 and 67. Pls help me how to identify wht to do..
Dear Student,
I can interpret that you are confused with how the excess money is adjusted. For that, please keep in mind the following points.
(a) If any premium is received along with application, then the received premium will not be considered in calculating the amount received from the shareholder. That is, share forfeiture will exclude the amount of premium already received.
(b) Whatever excess money you have received on application is first used towards the main instalment. That is, if say
Rs 4,000 is excess money and allotment is say 6,000 (3,500 on allotment and 2,500 on premium). Then, excess is first used in meeting 3,500 and now you will use the remaining excess for premium due. So, the net amount of premium not received will be 2,000.
If still you have any doubts, then please post the complete question (each in separate thread).
I can interpret that you are confused with how the excess money is adjusted. For that, please keep in mind the following points.
(a) If any premium is received along with application, then the received premium will not be considered in calculating the amount received from the shareholder. That is, share forfeiture will exclude the amount of premium already received.
(b) Whatever excess money you have received on application is first used towards the main instalment. That is, if say
Rs 4,000 is excess money and allotment is say 6,000 (3,500 on allotment and 2,500 on premium). Then, excess is first used in meeting 3,500 and now you will use the remaining excess for premium due. So, the net amount of premium not received will be 2,000.
If still you have any doubts, then please post the complete question (each in separate thread).