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