Ashoka Limited Company, which had issued equity shares of Rs.20 each at a premium of Rs. 4 per share, forfeited 1,000 shares for non-payment of final call of Rs.2 per share. 400 of the forfeited shares were reissued at Rs.14 per share out of the remaining shares of 200 shares reissued at Rs.20 per share. Balance of Share Forfeiture Account after reissue of shares will be:

Looking at the share forfeiture and reissue transactions:

Initial Information:

• Face value per share = Rs. 20
• Premium per share = Rs. 4
• Final call unpaid = Rs. 2 per share
• Shares forfeited = 1,000 shares
• Shares reissued = 400 + 200 = 600 shares
• Shares remaining forfeited = 1,000 - 600 = 400 shares

Amount credited to Share Forfeiture Account on forfeiture:

When shares are forfeited, the amount already received (excluding the unpaid call) is credited to Share Forfeiture Account.

Amount received per share = Face value - Unpaid call = Rs. 20 - Rs. 2 = Rs. 18

Total credited to Share Forfeiture Account = 1,000 × Rs. 18 = Rs. 18,000

Note: Premium of Rs. 4 is not relevant here as it was already paid before forfeiture.

Deductions from Share Forfeiture Account on reissue:

For 400 shares reissued at Rs. 14:

• Discount per share = Rs. 20 - Rs. 14 = Rs. 6
• Total discount = 400 × Rs. 6 = Rs. 2,400

For 200 shares reissued at Rs. 20:

• Discount = Rs. 0 (reissued at face value)

Total amount debited from Share Forfeiture Account = Rs. 2,400

After debiting discount, the remaining forfeiture amount for these 600 reissued shares (Rs. 18 × 600 - Rs. 2,400 = Rs. 8,400) is transferred to Capital Reserve.

Balance in Share Forfeiture Account:

This relates only to the 400 shares still not reissued.

Balance = 400 shares × Rs. 18 per share = Rs. 7,200