Question

44. Determine the maximum permissible discount and minimum reissue price that a company can allow at
the time of reissue of forfeited shares in the following cases:
(1) A share of 10 originally issued at par on which application and allotment money of 5 was received.
(ii) A share of 10 originally issued at a premium of 1 on which application and allotment money
(including premium) of 5 was received.
(iii) A share of 10 originally issued at a premium of 1 on which application and allotment money
(excluding premium) of 5 was received.

Answer 1

Answer:

Explanation:

Money received in respect of capital on shares forfeited is Rs. 5. Therefore, maximum permissible discount to be allowed is also Rs. 5.

Money received in respect of Capital is Rs. 4  total money received less premium money received . maximum permissible discount which can be allowed at the time of reissue is Rs. 4.

In this case, money received on shares forfeited in respect of capital is Rs. 5, and , therefore, this is the amount of maximum permissible discount.