For shares issued at par, the discount allowed is equal to value forfeited on these shares. While there is no restriction on re-issue of shares at premium, there are certain restrictions on re-issue of shares at discount which are: 1. 2 per Shares. 1000. 10 each has paid Rs. This is because the amount of money paid by Manoj (previous holder) is Rs. 600 and the face value of the share is Rs. If forfeited shares are re-issued at a discount, the amount of discount can, in no case, exceed the amount credited to Shares Forfeited Account. 10 per Shares. If a share of Rs. Forfeited shares can be reissued as fully paid at a par, premium or discount. 8 has been paid up is forfeited, it can be re-issued at the minimum price of: (a) Rs. 10 on which Rs. What is the maximum amount of discount at which forfeited shares can be re-issued? The issuing company can reissue forfeited shares at whatever price they want; typically, the reissue is at a discount to the initial price. 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. Q: After re-issue of forfeited shares the balance in forfeited shares a/c is transferred to _____. 3 on application and Rs. 2. The amount of discount allowed cannot exceed the amount that had been received on forfeited shares on their original issue, and should be debited to the âShare Forfeited A/câ. Normally, the forfeited shares are reissued as fully paid and at a discount. 8 per Shares. (d) Rs. 5 per Shares. 400. Shares forfeited by a company may either be cancelled or re-issued to another person at the discretion of the Board. (b) Rs. Reserve Capital A/c; Goodwill A/c; Capital Reserve A/c; General Reserve A/c; Ans: The correct option is C. Since the balance left in share forfeiture account after re-issue is treated as a profit, it is transferred to Capital Reserve A/c. Need for forfeiture and Re-issue of shares: If a member having been called upon to pay any call on his shares fails to pay the calls, the directors may either by adoption of Table A or by an express provision on the articles proceed to forfeit the shares held by such a defaulting member. To Share Reissued (No Amt not recd per share) Discount thus allowed on re-issue has to be debited to Shares Forfeited Account. Such shares can be reissued to some other person. When shares are forfeited, such shares become the property of the company and the directors can deal with them in any way they think best in the interests of the company. The shares can be reissued at par, premium and discount. Requirements of Companies Act. IDEAL / CPT / ACCOUNTS / ISSUE, FORFEITURE AND REISSUE OF SHARES 207 Calculation of Profit on Reâissue of Forfeited Shares : Credit balance of forfeited shares cannot be considered a surplus until the shares forfeited have been re â issued, Dr. Share Forfeiture A/c Cr. Re-issue of Forfeited Shares. Mr. X a holder of 10,000 shares for Rs. Forfeited shares can be reissued. 3 on allotment. 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. (c) Rs. They can be reissued even at a price lower than the paid up value of the reissued shares at the time of reissue. A forfeited share is share which is lost by share holder for failing to meet the purchase requirements. Now Pilot Ltd. decided to reissue the forfeited shares to Mr. Rishvik and the minimum price at which the shares can be issued should not be less than Rs. Re-issue of the Forfeited Shares.
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