The amount of discount on reissue of forfeited shares cannot exceed : (CPTDec., 2012) (A) 5% of the face value (B) 10% of the face value (C) The amount received on forfeited shares (D) The amount not received on forfeited shares. 10. Discount allowed on re-issue of forfeited shares is debited to : But the loss on reissue of a share cannot be more than the gain on forfeiture of that share credited to Forfeited Shares Account at the time of forfeiture. But the discount on such reissue shall not exceed the amount earlier forfeited on these shares. The Board of Directors can sell/ reissue or dispose of forfeited shares on such terms as it thinks fit. Share Forfeited A/c Dr. 160. 8 being called up originally issued at a discount of 10% for Rs.5 per share credited asRs. Answer: C. 100. In case of the forfeited shares were originally issued at par or at premium, then these shares can be reissued with the maximum discount = amount forfeited on the re-issued share. The forfeited shares are generally issued at a price lesser than their face value. 7 per share. 3. These can be re-issued at any price — premium, par value or discount. 8 and its face price is Rs. Answer. 1. 2. Deal with the forfeiture of shares issued with different conditions. However, the amount receivable on re-issue of such shares together with the amount already received from the defaulting member, shall not, in any case, be less than the face value of the shares. RE-ISSUE OF FORFEITED SHARES. Thus, the maximum amount of discount on reissue should not be more than the original discount … The maximum amount of discount on reissue of forfeited shares is that the amount of discount allowed cannot exceed the amount that had been received on forfeited shares on their original issue and that the discount allowed on re issue of forfeited shares should be debited to the share forfeited account. Reissue of Forfeited Shares: Forfeited shares can be either cancelled by the company or re-issued. They can be reissued even at a price lower than the paid up value of the reissued shares at the time of reissue. 10 each, Rs. To Share Capital A/c (300 xRs.10) 640. The maximum amount of discount that can be allowed at the time of reissue depends upon the following two circumstances: 1. 2. Forfeited shares can be reissued at a discount. Forfeited shares can be reissued as fully paid at a par, premium or discount. The Company can reissue its fortified shares at par, at premium or at discount but the reissue price together with the amount already received on such shares should not be less than the called up amount on each share.For example, if the forfeited shares are reissued at a discount, the amount of discount should not exceed the amount already paid by the defaulter. 400. We got Rs. So the reissue of such forfeited shares can be made at a discount against which some money has been received. 8 per share as per Board’s resolutions dated…) In this, it may be noted that the amount of discount allowed cannot exceed the amount that had been received on forfeited shares at the time of initial issue. Journalise the entry for re-issue of shares whether at discount or at premium. (Re-issue of 80 forfeited shares of Rs. But the discount so allowed to the new buyers should not exceed the amount already paid by the defaulting member. At discount on reissue of share will be adjusted from the fund collected for this purpose. Reissue Of Shares 3 Understand the concept and accounting treatment of call-in-arrears and call-in-advance. Now, these shares are reissued at Rs. For example, we issue 10 shares @ Rs. Forfeited shares can be reissued. If, however, it is not possible on account of resale of forfeited shares, he can sue the company for damages. 6 per share from defaulter shareholder and these shares are forfeited due to not paying Rs. A resolution sanctioning the reissue must be passed in the Board Meeting. Discount on Issue of Shares A/c Dr. 80. In other words, if the forfeited shares are reissued at a discount, the amount of discount should not exceed the amount already paid by the defaulter.
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