Question

12 Kauthari Ltd. forfeited 2,000 equity shares of 100 each issued at a premium of 10% for non payment of first call 40 per share. Second & Final call20 has not yet been called. Find out the maximum permissible discount at the time of reissue of these shares. (a) 1,20,000 (b) ₹ ₹80,000 (c) 2,00,000 (d) 2,20,000​

Answer 1

Answer:

Forfeiture amount per share is the amount to be received by the company on forfeiture of each share.

ForfeitureAmount=ApplicationAmount+AllotmentAmount

Substitute the values in above equation

ForfeitureAmount=Rs20

Forfeiture amount is the money received by company on forfeiture (cancellation of share) or on the reissue of share.

ForfeitureAmount=No.ofshares×ForfeitureAmount

Substitute the values in the above equation

ForfeitureAmount=3200shares×Rs20=Rs64,000

ForfeitureAmountfor1280shares=1280shares×Rs20=Rs25,600

ForfeitureAmountonreissue=1280shares×Rs10=Rs12,800

Profit on the reissue is the profit earned by the company when the forfeited shares are reissued

Profitonreissue=ForfeitedAmountonforfeiture−ForfeitedAmountonReissue

Substitute the values in the above equation

Profitonreissue=Rs25,600−Rs12,800=Rs12,800

Hence, the profit earned on the reissue of shares is Rs 12,800.

Share forfeiture a/c Dr Rs12,800

To share capital a/c Rs12,800.

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