6) What will be the maximum permissible discount which a company can allow at the time of reissue of forfeited shares on a share of Rs. 100 originally issued at a premium of Rs. 10 on which application and allotment money (including Premium) Rs. 50 has been recived.

Open in App

Solution

Dear Student

As per provisions A company can not incur loss on Reissue of Forfeited shares , Therefore Maximum Discount a company can bear on Reissue of Forfeited share is the amount already present in share forfeiture account.

Here Amount per share in Share forfeiture A/c is Rs 40 per share.
Therefore Maximum discount = Rs 40/-

Regards

Suggest Corrections

Similar questions

Q. D Ltd. issued 1,00,000 equity shares of Rs 10 each at a premium of Rs. 2 per share. The amount payable was Rs. 2 on application, Rs. 5 on allotment (including premium) & rest on first & final call. Applications were received for 1,20,000 shares. Excess application money was refunded to applications. All monies due were received except the allotment and first & final call monies on 1,000 shares. These shares were forfeited and reissued at Rs 9 per share.
On reissue of forfeited shares, balance of share forfeiture account transferred to capital reserve account will be _____.

XYZ Ltd. forfeited 500 equity shares of Rs. 100 each issued at a premium of 10%, fully called-up. The amount payable on shares is: on application Rs. 20, On allotment Rs.40 (including premium), On first and Final call Rs. 50. The company has called till the allotment stage. And these shareholders have only paid till application. The journal entry on forfeiture will be:

Q. A company has issued

10, 000

shares of

R s . 20

each and amount has been demanded as under:
On application -

R s . 5

On allotment -

R s . 7

1 s t

Call -

R s . 6

2 n d

and Final Call -

R s . 2

A shareholder holding

400

shares paid only application money and his shares have been forfeited. On reissue of these shares @

R s . 16

per share, amount debited to shares forfeited account is _____________ .

Q. D Ltd. issued 1,00,000 equity shares of Rs 10 each at a premium of Rs. 2 per share. The amount payable was Rs. 2 on application, Rs. 5 on allotment (including premium) & rest on first & final call. Applications were received for 1,20,000 shares. Excess application money was refunded to applications. All monies due were received except the allotment and first & final call monies on 1,000 shares. These shares were forfeited and reissued at Rs 9 per share.
Amount to be refunded on allotment for excess application will be _____.

Journalise the following transaction in the books Bhushan Oil Ltd:

(a) 200 shares of Rs 100 each issued at a discount of Rs 10 were forfeited for the non payment of allotment money of Rs 50 per share. The first and final call of Rs 20 per share on these share were not made. The forfeited share were reissued at Rs 70 per share as fully paid-up.

(b) 150 shares of Rs 10 each issued at a premium of Rs 4 per share payable with allotment were forfeited for non-payment of allotment money of Rs 8 per share including premium. The first and final call of Rs 4 per share were not made. The forfeited share were reissued at Rs 15 per share fully paid-up.

(c) 400 share of Rs 50 each issued at par were forfeited for non-payment of final call of Rs 10 per share. These share were reissued at Rs 45 per share fully paid-up.

Join BYJU'S Learning Program