A Ltd forfeited a share of Rs 100 issued at a premium of 20% for non-payment of the first call of Rs 30 per share and final call of Rs 10 per share. State the minimum price at which this share can be reissued.
Dear Student,
When shares are forfeited, then maximum discount which can be allowed at the time of re-issue of shares is the total amount forfeited. In the given case shares were forfeited for non-payment of first call of Rs 30 per share & final call of Rs 10 per share. Therefore total amount forfeited is Rs. 60 (100-40). So, maximum discount allowable is Rs 60.
Therefore Minimum price at which share can be reissued is Rs 40.
Regards,
When shares are forfeited, then maximum discount which can be allowed at the time of re-issue of shares is the total amount forfeited. In the given case shares were forfeited for non-payment of first call of Rs 30 per share & final call of Rs 10 per share. Therefore total amount forfeited is Rs. 60 (100-40). So, maximum discount allowable is Rs 60.
Therefore Minimum price at which share can be reissued is Rs 40.
Regards,