Can forfeited shares be reissued?
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.
Can the forfeited shares be reissued at a discount 1?
Forfeited shares can be reissued at a discount.
What is the price at which forfeited shares can be reissued?
Here is your answer. The Re-issue price of forfeited shares must be at least equal to the difference between the paid up value of Re-issued Shares and the Amount Forfeited on Re-issue Shares. In other words, Re-issue price must not be less than the amount unpaid on Forfeited Shares. Regards.
Under what circumstances can a company forfeit its shares?
When a shareholder fails to pay the allotment money or any subsequent calls, then the company informs the shareholder by giving him/her a proper notice. If after the notification, the shareholder still fails to pay the due money, then the company is allowed to forfeit the shares of such shareholders.
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.
What is the maximum amount of discount at which forfeited shares can be re-issued?
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.
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 is forfeiture of shares What are the effects of forfeitures can they be reissued?
This contract makes it binding upon the shareholder to pay-up the amount due on the issue price of the share when company calls for it through the call on shares. … Shares which are forfeited will no longer remain the shares of that shareholder. The money paid by that shareholder is also not refundable by the company.
What is the entry for forfeiture of shares?
When Forfeiture of shares Issued at Par
The company debits the Share Capital Account with the amount called-up up to the date of forfeiture on shares. It credits the Shares Allotment Amount or Shares Call Account with amount called-up on forfeited shares but due from the shareholders.
How are shares forfeited?
A share is forfeited when the shareholder fails to pay the subscription money called upon by the issuing company.