when the shares are being partly reissued at discount , we check the amount of discount that can be allowed . for example : 600 shares(forfeited)=2100 , 300 shares(reissue)=1050 as rs 7 called up with a face value of rs.10 . so a maximum discount of 1050 can be given and when the discount is being allowed it comes to only 900 . so no issue ..my query is that what if the discount is more than the maximum discount , that is in this case for example what if 1050 max disc. > 1200 disc. to be allowed ? how to deal with ?
Q.12. A limited company forfeited 1,200 shares of Rs. 10 each (originally issued at 10 % premium which was payable along with application money) on which allotment money of Rs. 3 and first call money of Rs. 2 were not received; the final call money of Rs. 2 is not yet called. These shares were originally allotted on pro-rata basis in the ratio 3 : 4. These shares were subsequently reissued at a discount of Rs. 2 per share credited as Rs. 8 paid up.
Pass necessary Journal entries for the forfeiture and reissue of shares.
On application - Rs. 75 per share (including premium Rs. 25)
On allotment - Rs. 50 per share (including premium Rs. 25)
On first and final call - the balance amount.
Applications for Rs. 55,000 shares were received. Allotment was made to all the applicants and the company received all the money due on allotment except K who was allotted 500 shares and his shares were immediately forfeited. Afterwards, the first and final call was made. L to whom 300 shares were allotted failed to pay the first and final call. His shares were also forfeited. 300 shares of K and 200 shares of L were re-issued for Rs. 75,000 fully paid up.
Pass necessary journal entries in the books of Som Ltd. for the above transactions.
when the shares are being partly reissued at discount , we check the amount of discount that can be allowed . for example : 600 shares(forfeited)=2100 , 300 shares(reissue)=1050 as rs 7 called up with a face value of rs.10 . so a maximum discount of 1050 can be given and when the discount is being allowed it comes to only 900 . so no issue ..my query is that what if the discount is more than the maximum discount , that is in this case for example what if 1050 max disc. > 1200 disc. to be allowed ? how to deal with ?
Q.12. Z Ltd. forfeited 500 shares of Rs 10 each issued at a premium of 20% to Ankit, who had applied for 600 shares, for non- payment of allotment money at Rs 6 per share ( including premium) and the first and final call of Rs 2 per share. The amount overpaid on application was adjusted towards allotment.
300 of the forfeited shares were reissued to Rohit at the maximum discount allowed by law.
Pass necessary entries regarding forfeiture and reissue of shares.
how to deal with this type of question ?
12. (a) Z Ltd. forfeited 500 shares of Rs.10 each issued at a premium of 20% at Ankit, who had applied for 600 shares, for non-payment of allotment money at Rs. 6 per share (including premium) and the first and final call of Rs. 2 per share. The amount overpaid on application was adjusted towards allotment.
300 of the forfeited shares were reissued to Rohit at th maximum discount allowed by law.
Pass necessary entries regarding forfeiture and reissued of shares.
Q(b) Which value has been affected by rejecting the 1,50,000 applications, Suggest a better alternative for the same.