Purna Ltd. forfeited 16,000 equity shares of Rs. 200 each issued at a premium of 10% for non-payment of first and final call of Rs. 60 per share. The minimum amount at which all forfeited shares can be reissued will be:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Rs. 9,60,000
Forfeited shares can be reissued at a discount, but the discount cannot exceed the amount already received on them, which sits in the Share Forfeiture account. So the minimum reissue price is face value less the amount forfeited.
Unpaid on each share (first and final call) = Rs. 60
Received on face value = Rs. 200 − Rs. 60 = Rs. 140 per share
The premium was received earlier and is not part of the forfeited amount
Minimum reissue price = Rs. 200 − Rs. 140 = Rs. 60 per share
For 16,000 shares = 16,000 × Rs. 60 = Rs. 9,60,000
Shortcut: the lowest price a forfeited share can fetch is the amount that was left unpaid on it. 16,000 shares × Rs. 60 gives the answer at once.
NCERT (2026-27 edition): |