How much discount can be given on reissue of forfeited shares?

At the time of reissue of forfeited shares a discount of Rs 2 per share is allowed so the total amount of discount of Rs 400 is adjusted from the forfeited amount of Rs 600 and the balance amount of Rs 200 is transferred to Capital Reserve A/c being a capital gain.

What maximum discount can be allowed on the reissue of the forfeited shares?

If the forfeited shares were originally issued at par or at premium, then these forfeited shares can be reissued with the maximum discount equal to the amount received (or paid by) the original shareholder. For example, a company issued shares at Rs 10 at a par.

Can the forfeited shares be reissued at a discount 1?

These shares can be reissued at par, at premium or at discount. … The amount of discount allowed at the time of reissue in no case should be more than the amount forfeited on such shares.

What is the maximum discount at the time of reissue?

4 (that is, total money received less premium money received ), therefore, maximum permissible discount which can be allowed at the time of reissue is Rs. 4. (iii) 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.

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What is the minimum amount of discount which may be allowed on reissue of shares?

At the time of reissue of forfeited shares a discount of Rs 2 per share is allowed so the total amount of discount of Rs 400 is adjusted from the forfeited amount of Rs 600 and the balance amount of Rs 200 is transferred to Capital Reserve A/c being a capital gain.

What amount of gain on reissue will be transferred?

1200 is the gain that will be transferred to the General Reserve.

What is the maximum limit of premium on shares?

Maximum limit of Premium on shares is – No limit.

Can forfeited shares be reissued?

ADVERTISEMENTS: Accounting Entries Regarding Reissue of Forfeited Shares! The forfeited shares can be reissued by the company at any price. But in no case, the amount collected on the reissue of such shares plus the amount already forfeited be less than the amount credited as paid upon reissue of shares.

How can profit on reissue of forfeited shares be treated in accounts?

If a Company makes any loss on reissue of shares, such loss is made good by making adjustments by debiting the Forfeited Shares Account. The balance remaining the forfeited Share Account is a capital profit and it must be transferred to Capital Reserve Account.