Practicing Success
Practicing Success
CUET Preparation Today
| On a share of Rs.100 issued at a premium of Rs.10 the whole amount has been called up but in the case of a shareholder only Rs.80 has been received. These shares were forfeited and reissued at Rs.90 fully paid up. What will be the amount of discount on reissue? |
Rs 10 debited to Share Forfeiture A/c Rs 30 debited to Share Forfeiture A/c Rs 20 debited to Share Forfeiture A/c Rs 20 debited to discount on shares A/c |
| Rs 10 debited to Share Forfeiture A/c |
| Discount on reissue of shares = Nominal value - Reissue Price (100-90 =10). Such discount on reissue is adjusted from the Share Forfeiture A/c because it contains the amount paid by the previous shareholder that has been forfeited which is a capital profit for the company. |
