Answer: Cancellation of shares. Previous Lesson. On Receipt of Security Premium Amount. Question-59 . Forfeiture of shares – issued at Premium. Class 9 (Forfeiture of Shares Issued at Premium) Corporate Accounting Class 9 (Forfeiture of Shares Issued at Premium) In Progress. Forfeited 200 equity shares Rs. Share Forfeiture A/c. Question-59 . Question 17. Issued at Premium: During forfeiture of shares issued at premium, there are primarily two options for a company. 50% of forfeited shares were re-issued at Rs 8 per share fully paid-up. The accounting entry passed to record the same is: 2. 10 each issued at a discount of 5% held by Sonu for non-payment of the first ‘ call of Rs. Question-58 . There are four situations in which re-issue of shares take place. 20 (A share of Rs 100 on which Rs 70 called excluding the amount of securities premium Rs 10, forfeited for non-payment of Rs 20) Bank A/c. R Ltd. 3. 6 per share including premium and balance in two calls in equal amount. Out of these, 100 Equity shares were reissued to Nikhil at Rs. Share Capital A/c: Dr. 900 : Securities Premium A/c: Dr. 600 : To Share Allotment A/c : 1,200 : To Share Forfeiture A/c : 300 (150 shares of Rs 10 each forfeited for non–payment of allotment money of Rs 8 per share including premium of Rs 4 per share) Bank A/c: Dr. 2,250 : To Share Capital A/c : 1,500 : To Securities Premium A/c : 750 Gaurav applied for 5,000 shares of ₹ 10 each at a premium of 2.50 per share. 1271 Views. Question-51^ Question-52. The reason is that the company can re-issue these shares at a discount and it will adjust this Answer: B. 3 per share, on allotment Rs. 5 per share, the first call of Rs. This depends on the clearance of a security premium amount. Ajanta Company forfeited 500 equity shares of Rs. If at the time of the forfeiture the entire amount of premium has already been received by the company, then the entries remain the same, i.e. 14 per share on 25th December. Question-52 . Question 16. Forfeiture of shares issued at premium : There are 2 cases which might arise : 1. For shares issued at premium, if premium is received the maximum discount will be the amount that is forfeited. The company cannot treat the credit balance in the Share Forfeiture A/c until it re-issues the forfeited shares. 10 each issued at a premium of Rs. Question-53 . 2. Question-58 . Forfeiture of Shares, issued at premium : – In such a case, the forfeiture can take place, either before receipt of premium or after receipt of premium. Question-53. Class 9 (Forfeiture of Shares Issued at Premium) 4 Topics . Question-53 . Pass necessary journal entries for the forfeiture and re-issue of shares. Dr. 30 . To Share Forfeiture (Rs 60 – 10 premium) 50 . 5 per share payable as: On application Rs. Forfeiture might be of :: 1. Shares Issued At Discount 6. When shares are issued at premium forfeiture can be done in two different ways as per situation. If premium on forfeited shares has been received, Securities Premium Account must not be debited on forfeiture of shares. Question-55 . Lesson Content . To Calls-In-Arrears A/c . In this case Securities Premium A/c will not be affected. The first and final call of Rs 3 per share has not been made yet. To Share Capital A/c . The shares were called up to the 1st call stage. 10 each, issued at a premium of Rs. After having paid ₹ 3 per share on application, he did not pay allotment money of ₹ 4.50 per share (including premium) and on his subsequent failure to pay the first call of ₹ 2 per share, his shares were forfeited. In this case, the called-up amount is debited along with its share capital amount from its relevant account. But he was allotted only 2,500 shares on pro rata basis . 3 on final call. Question-51^ Question-52 . However, the amount receivable on reissue of such shares together with the amount already received from defaulting shareholders, shall not, in any case, be less than the original issue price of shares. Illustration 5 (Forfeiture of Shares Issued at Premium): A Ltd. had its issued capital comprising 20,000 equity shares of Rs. State any three purposes other than 'issue of bonus shares' for which securities premium can be utilized. The journal entry will be same as if the shares had been issued at par. Out of these, 15 shares were re-issued to Naresh as Rs 7 per share paid up for Rs 8 per share. Conditions for Re-issue of Shares. Question-54. Half the forfeited shares were reissued at ₹ 1,500 as fully paid-up. 10 each at 20% premium payable as follows : Application – Rs. Calculate the amount to be credited to Share Forfeiture … RE-ISSUE FORFEITURE OF SHARES •Case 2 when shares are Re-issued at 29. Shares Issued At Par 2. Class 9 (Forfeiture of Share Issued at Premium) 4 Topics . RE-ISSUE OF FORFEITED SHARES Share Forfeiture A/C 30. 5 per share, held by Motilal on 15th December, for non-payment allotment money of Rs. Record the journal entries for the forfeiture and reissue of shares. 2. 2, Allotment Rs. Both situations related to this are explained below. 10 each payable as: Rs. However, if reissue price is sufficient enough, then the share premium can be re-recorded and the balance can be transferred to capital reserve. X Co. Ltd. forfeited 150 Equity share of Rs. State the minimum price at which this share can be reissued. 3 on allotment (including premium), Rs. Forfeiture of Shares Issued at Premium. Back to Course. Forfeiture of share issued at premium. Question-54 . If the shares were issued at Premium and premium amount was not received; Accounting Treatment and Reissue Accounting. Question-56 . Question-55 . When a company issues shares at a price more than the face value, the shares are said to be issued at premium. Question-57 . If the shares were initially issued at a premium then the forfeiture treatment changes a little. 1. (All India 2011) Premium on Shares Forfeited . His shares were forfeited. as if the shares were issued at par. The Directors of a company forfeited 300 shares of ₹ 10 each issued at a premium of ₹ 3 per share , for the non-payment of the first call money of ₹ 2 per share . When the forfeited shares are re-issued at par or at a premium, the entries are similar to the entries already passed in connection with the issue of shares at par or at premium. It is obligatory because of legal restrictions placed by section 78 of the Companies Act on the uses of securities premium received. Class 9 (Forfeiture of Shares Issued at Premium) Class XII (Accounts) – CBSE Exams Class 9 (Forfeiture of Shares Issued at Premium) In Progress. A holder of 200 shares failed to pay the First and Final Call. Question-52. Question-60 . If 400 shares of ₹10 issued at a premium of ₹3 on which the full amount has been called and ₹8 (including premium) have been received are forfeited, the forfeiture account should be credited with : (A) ₹3,200 (B) ₹2,000 (C) ₹1,200 (D) ₹2,800. Question-54 . When the shares are forfeited, there are two options with the company, i.e., they can dispose of the shares, or the shares can be reissued. Question-60 . When money for premium has already been received on forfeited shares. Forfeiture and Reissue of Shares Journal Entries Noor Khan Limited Company was established with Authorized Capital of 100,000 shares and invited applications for 10,000 shares of 10 each at premium of Rs. Give the meaning of forfeiture of share. When a shareholder fails to pay the amount of premium: The share premium amount is normally collected along with share allotment. Pass the necessary entry regarding forfeiture. Illustration 1: Moonshine Company Ltd. was newly formed with an authorised capital of Rs. Forfeiture of shares which were issued at a DiscountIn this case also Share Capital Account will be debited with the called-up value of shares forfeited, Allotment or Calls Account will be credited with the amount due but not paid by the shareholder(s). 2 on application, Rs. Shares reissued at par or at premium, when originally issued at par. Fundamentals Of Accounting: Issue;Forfetire And Reissue Of Shares 4 SHARE CAPITAL Total capital of the company is divided into a number of small indivisible units of a fixed amount and each such unit is called a share. Answer . 2 per share and the final call of Rs. 3 per share. A company issued 5,000 shares of Rs. Dr. 70 . 96. Question-51 . 5. The excess is called as premium. Forfeiture of share means the cancellation of allotment due to breach of contract and to treat the amount already received on such shares as forfeited to the company. (Alternatively, Calls-in-Arrears Account can be credited). Premium Money Has Been Received Prior to the Forfeiture. 8 per share, including premium of Rs. Question-53. Deal with the forfeiture of shares issued with different conditions. Question-54. Class 10 (Forfeiture and Reissue Only) 11 Topics . Previous Lesson. Calculation of profit on re-issue when different categories of shares are re-issued. 0% Complete 0/4 Steps. 3 per share. 7. These shares can be reissued at par, premium, and discount and the entries are as follows, 1.If reissue is at Par. (Forfeiture—Shares issued at discount). The final call of ₹ 2 per share has not been made. Forfeited shares originally issued on premium where premium money was not received need not be reissued at premium. 1 per share and final call of Rs. A Ltd forfeited a share of 100 issued at a premium of 20% for non-payment of first call of 30 per share and’ final call of 10 per share. Class 10 (Forfeiture and Reissue Only ) 11 Topics . Record the journal entries for forfeiture and reissue of shares in the following cases: (a) X Ltd. forfeited 20 shares of Rs 10 each, Rs 7 called up on which the shareholder had paid application and allotment money of Rs 5 per share. Shares Issued At Premium 3. If shares issued at a premium are forfeited, find out whether the premium on forfeited shares has been realised or not. 0% Complete 0/4 Steps. Question-56 . 18.TAG Ltd forfeited 400 shares of Rs 10 each issued at a premium of Rs 1 per share for the non-payment of allotment of Rs 4 per share (including premium). 3 on 1st call and Rs. When money for premium has not been received on forfeited shares. The revoke of share premium is essential on non-payment of share premium. (i) When shares are issued for cash at par: Following are the journal entries to be passed: Illustration 1. 1. Back to Course. 5 (including premium) and First and Final Call- Rs. When premium is received : When shares originally issued at premium, on which premium amount has been received are forfeited, then the premium once collected cannot be cancelled (Sec.78). (CBSE Sample Paper 2016) Answer: ₹ 40 per share! When premium is not received : When shares originally issued at a premium on which the premium … Lesson Content . Question-57 . Journalise the entry for re-issue of shares whether at discount or at premium. Question-51. Answer. Forfeited shares reissued at discount when originally issued at par. RE-ISSUED OF FORFETED SHARES •Case 1 when share are Re-Issued at PAR Bank A/C Dr. To Share Capital A/C 28.
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