Accountancy Part AAccounting for Shares

6,000 shares of Rs. 30 on which Rs. 21 have been called up and Rs. 15…

6,000 shares of Rs. 30 on which Rs. 21 have been called up and Rs. 15 has been paid are forfeited. Out of these, 4,500 shares are reissued for Rs. 27 as fully paid. What is the amount to be debited to share forfeiture account at the time of reissue of shares?

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → Rs. 13,500

When forfeited shares are reissued below their face value, the discount allowed is debited to Share Forfeiture Account.

Discount per share = Rs. 30 − Rs. 27 = Rs. 3
Debit to Share Forfeiture A/c = 4,500 × Rs. 3 = Rs. 13,500

The rest of the amount forfeited on these 4,500 shares is a capital profit transferred to Capital Reserve; it is not part of this debit.

NCERT (2026-27 edition):
Reissue of Forfeited Shares – “… Forfeited shares may be reissued as fully paid at a par, premium, discount. In this context, it may be noted that the amount of discount allowed cannot exceed the amount that had been received on forfeited shares at the time of initial issue, and that the discount allowed on reissue of forfeited shares should be debited to the ‘Forfeited Share Account’.”