Best answer: In which case a company can reissue the shares at discount?

Can the forfeited shares be reissued at a discount?

Forfeited shares can be reissued at a discount.

What is the entry for reissue of shares?

Journal Entries for Re-issue of Forfeited Shares:

Date Particulars
1. On re-issue of shares Bank A/c (Actual amount received) Dr.
Forfeited Shares A/c (loss on re-issue) Dr.
To Share Capital A/c Cr.
(Being ….. forfeited shares re-issued @ ₹…each as per the Board’s Resolution no… dated….)

In what circumstances can a company forfeit its shares can forfeit share be reissued at a discount what entries are made in the forfeited shares account before and after the reissue of forfeited shares explain with the help of examples?

The shares forfeited can be reissued to another shareholder at a different price by the company. The forfeited shares are generally reissued at a discount to the issue price. This is because the company would have forfeited a portion of the issue price already paid on the shares earlier.

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What is the maximum discount a company can give on reissue of forfeited share?

2. In case of the forfeited shares were originally issued at discount, then these forfeited shares can be reissued with the maximum discount equal = amount forfeited on the re-issued share + the discount allowed at the time of original issue.

Can forfeited shares be reissued if so at what terms?

The directors of the company are empowered to re-issue the forfeited shares if authorized by its articles. A forfeited share may be sold or otherwise disposed of, on such terms and in such manner as the Board thinks fit. Such shares may be re-issued at par, at a premium or even at a discount.

How do you calculate profit 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.

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.

What amount of gain on reissue will be transferred?

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

Can forfeited shares be Cancelled?

Forfeited shares are held by the company and can then be sold, re-allotted, cancelled or otherwise disposed of as the directors think fit. … At any time before the company disposes of or cancels forfeited shares, the directors may decide to cancel the forfeiture on payment of all calls and interest due on the shares.

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What is the procedure of forfeiture of shares?

Forfeiture of shares is a process where the company forfeits the shares of a member or shareholder who fails to pay the call on shares or instalments of the issue price of his shares within a certain period of time after they fall due.

When shares are forfeited the called-up amount on shares is debited to?

When shares are forfeited, share capital account is debited. Explanation: Share Capital Account represents the liability of the company as it is the amount that is borrowed from the public. Therefore, at the time of forfeiture of shares, it is debited with a called-up amount.