Multiple choice

A company forfeited 100 equity shares of Rs. 100 each issued at a premium of 50% (to be paid at the time of allotment) on which first call money of Rs. 30 per share was not received, final call of Rs. 20 is yet to be made. These shares were subsequently re - issued at Rs. 70 per share as Rs. 80 paid up. The profit on re - issue is

  1. Rs. 5, 000

  2. Rs. 4, 000

  3. Rs. 2, 000

  4. none of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Balance in Share Forefeture account                    =Rs5000 (already received) Amount adjusted towards share capital since shares are issued at Rs 70, Rs 80 paid up =Rs 1000 Amount of profit                                                           = rs (5000-1000)                                                                                        =Rs 4000  

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