Maximum Permissible Discount and Minimum Reissue Price at the time of Reissue

50. Determine the maximum permissible discount and minimum reissue price that a company can allow at
the time of reissue of forfeited shares in the following cases:
() A share of? 10 originally issued at par on which application and allotment money of 5 was received.
(i) Ashare of 10originally issued at a premium of 1on which application and allotment money
(including premium) of 5 was received.
(ii) Ashare of 10originally issued at apremium of ? 1on which application and allotment money
(excludingpremium) of 5 was received.
[Ans.: Maximum Permissible Discount: (i) 5per share; (ii) 4per share; (ii) R5 per share.
Minimum Reissue Price: (i) 5 per share; (ii) 6 per share: (ii)5 per share.]
Treatment of Gain on Reissue
51. What amount of gain on reissue will be transferred to Capital Reserve under following situations?
(i) 3,000 shares of 10 each of Rakesh were forfeited by crediting 5,000 to Forfeited Shares Account.
Out of these, 1,800 shares were reissued to Mohan for 9 per share as fully paid-up.
(i) Z Ltd. forfeited 20 shares of 100 each (? 60 called-up) issued at par to Shiv on which he paid
20 per share. Out of these, 15 shares were reissued to Rajesh as 60 paid-up for 45 per share.
[Ans.: (i) 1,200; (i) Z75.]
orfeiture andReissue of Shares which were Issued at Par
52. Z. Ltd. issued 10,000 shares of the value of 10 each, payable 3 on application, 3 on allotment
and 4 on the first and final call. All amounts are duly received except the call money on 100 shares.
These shares are subsequently forfeited by Directors and are resold as fully paid-up for 500.
Give necessary Journal entries for the transactions. (Ans.: Capital Reserve-100.]
S3. Alfa Ltd.forfeited 900 Equity Shares of 100 each for the non-payment of allotment money of 30 per
share and the frst callof 20 per share. The second and finalcall of 25 per share has not been made. The
forfeited shares were reissued for 90 per share, ? 75 paid-up.
Journalise the above. [Ans.:Capital Reserve 22,500.]
54. Max Ltd. forfeited 500 shares of 100 each for non-payment of first call of 20 per share and final call of
?25 per share. 250 of these shares were re-issued at 50 per share fully paid-up.
Pass the necessary Journalentries in the books of Max Ltd. for forfeiture and re-issue of shares. Also prepare
the Share Forfeiture Account. (CBSE 2020)
[Ans.: Gain on re-issue transferred to Capital Reserve1250.]
 55. On 1st May, 2022, Moneyplus Ltd. forfeited 200 shares of 20 each, ? 15 per share
called-up,
R10 per share has been paid by A, the anmount of the first call of ?5 per share being unpaid. Ten on which
Directors reissued the forfeited shares to Bcredited as 15 per share paid-up, fora payment of ?days later, the
10nhe
Give Journal entries in the company's books to record the forfeited shares and their reissue.
[Ans.: Capital Reserve-
56. The Directors of Maharana Ltd.resolved on 1st May, 2020 that 2,000 Equity Shares of ? 10 each, co 1,000,
be forfeited for non-payment of final call of ? 2.50. On 10th June, 2020, 1,800 of these shares
were
[Ans.: Capital Reserve- reissued
for t6 per share. Give necessary Journal entries.
57. Sunshine Industries Ltd. issued 20,000 shares of ?100 each payable 25 per share on application, 6,3% 00.)
share on allotment and the balance in two calls of 25 each. The company did not make the final rar
{ 25 per share. Allthe money was duly received with the exception of the amount due on the first rall
400 shares held by Mr. Modi. The Board of Directors forfeited these shares and subsequently reissued tha
@75 per share paid-up for asunm of 28,000.
Journalise the above transactions and prepare Share Capital Account. [Ans.: Capital Reserve 18,000)
58. R.P. Ltd. forfeited 1,500 shares of Rahim of 10each issued at a premium of 3 per share for non-pavment
of allotment and first callmoney. Rahim had applied for 3,000 shares. On these shares, amount was payahie
as follows:
On Application 3per share,
On Allotment (including premium) 75 pershare,
On First Call ?3 per share,
On Final Call Balance.
Final cal has not been called up. 1,000 of theforfeited shares were reissued for 8,500 as fully paid-up.
Record the necessary Journal entries for the above transactions in the books of R.P. Ltd. (CBSE 2020)
[Ans.: Capital Reserve-7 3,500.)
59. The Hindustan Manufacturing Ltd. had a total subscribed capital of 10,00,000 in Equity Shares of 10 each
of which 7.50 were called-up. A final call of 2.50 was made and all amount paid except two calls of
72.50each in respect of 100 shares held by D. These shares were forfeited and reissued at ? 8 per share.
Pass necessary Journal entries to record the transactions of final call, forfeiture of shares and reissue of
forfeited shares. Also, prepare the Balance Sheet of the company.
[Ans.: Capital Reserve300; Balance Sheet Total-10,00,300.]
60. Star Ltd. forfeited 500 Equity shares of 100 each for non-payment of first callof 30 per share. The hnal
call of ? 10per share was not yet made. Out of these, 60% shares were reissued for 39,000fuly paa.
Journalise the forfeiture and reissue of shares. [Ans.: Capital Reserve- 18,000.]
61. Super Star Ltd. makes an issue of 10,000 Equity Shares of ? 100 each, payable as:
On Application and Allotment 50 per share,
On First Call 7 25 per share,
On Second and Final Call ?25 per share.
Members holding 400 shares did not pay the second and final call and the shares are duly forfeited, 2000
which are reissued as fully paid-up @ 50 per share. Pass Journal entries in the books of the company
Ans.: Capital Reserve--5,000J

62. Give necessary Journal entries:

of 10 ed
(i) The Directors of Devendra Ltd. resolved on 1st January, 2010 that 100 EquityShares
shares we
8paid-up be forfeited for non-payment of final call of 2. On 1st Februarv, 60 of these
reissued @?7 per share as fully paid-up. which
to Mukesh on
(i) Virender Limitedforfeited 20shares of 100 each ( 60 called-up) issued at par
reissued to Sanieev as 60 paid-uP 75.]
he had paid ? 20 per share. Out of these, 15 shares were Reserve-
45 per share. [Ans.: () Capital Reserve* 300; (i) Capital
c2 Show the forfeiture and reissue entries under each of
the following cases:
(i) KBC Ltd. forfeited 300 shares of? 10each, ?&
called-up held by Amit for
moneyof 3per share. These shares were reissued toZoly for 10per non-payment of second call
share fully paid-up.
as
(ii) KK Ltd. forfeited 400 shares of 10 each, fully
called-up, held by Bhawna for non-payment of final
callmoney of 4 per share. These shares were reissued to Tarun at 12
per share as fully paid-up.
(ii) Light Ltd.forfeited 250 shares of? 10each,fully
money of
called-up,heldbyChetan fornon-paymentofallotnent
3per share and first and final call money of 4 per share. These shares were reissued
@R8 per share as fully paid-up to Prem. [Ans.:Capital Reserve--() 1,500; (i) 2,400; (ii) 250.]
64. Rekha holds 100 shares of 10 each on which she has paid 1 per share on application.
Sunita holds 200 shares of 10 each on which she has paid 1 and 2 per share on
application and
allotment respectively.
Teena holds 300 shares of 10 each and has paid1on application,2 on allotment and 3 on first call.
They all fail to pay their arrears and the second call of 4 per share. Shares are forfeited and subsequently
reissued@1l per share as fully paid-up.
Journalise the above. [Ans.: Capital Reserve7 2,500.)
[Hint: As shares have been reissued at premium, discount allowed on reissue is Nil. Thus, total armount of
72,500 credited to Forfeited Shares Account will be transferred to Capital Reserve.]
65. Record the Journal entries for forfeiture and reissue of shares in the following cases:
() Basak Ltd. forfeited 20 shares of 10each, 7 called-up on which the shareholder had paid
application and allotment money of 5 per share. Out of these, 15 shares were reissued to Naresh as
7 per share paid-up for 8 per share.
(i) YLtd. forfeited 90 shares of 10 each, 8called-up issued at a premium of ?2per share to Rfor
non-payment of allotment money of 5 per share (including premium). Out of these, 80 shares were
reissued to Sanjay as ? 8 called-up for 10 per share. (Delhi 2013)
[Ans.:Amount transferred to Capital Reserve--) 75; (i) 400.]
66. Jain Ltd. invited applications for issuing 1,12,000 equity shares of 10 each at par. The amount per share
was payable as follows:
On Application
On Allotment 2
On First call 73
On Second and Final call 4

Applications for 1,00,000 shares were received. Shares were fully allotted to all the applicants. Ramesh
failed to pay his allotment money which was 2,000. His shares were forfeited immediately. Suresh did
not pay the first callon 500shares applied by him. His shares were forfeited after the first call. The forfeited
shares of Rameshand Suresh were reissued at9 per share fully paid-up. Afterwards the second andfinal
callwas made and was duly received.
Pass necessary Journal entries for the above transactions in the books of Jain Ltd. (CBSE 2019)
[Ans.: Capital Reserve 1,000.]
67. Software Ltd. company with registered capital of 5,00,000 in shares of ? 10 each issued 20,000 of such
shares payable 2on application, ?4on allotment, ? 2on frst call and 2on final call. AIl the money
payable on allotment was received but on the first call being made, one shareholder paid the entire
balance on his holdingof 300 shares and five shareholders with atotal holding of 1,000shares didnot
pay their dues on the frst call. These shares were forfeited for non-payment of frst call money. Final call
was made and all the money due was received. Later on, forfeited shares were reissued @6 per share as
fully paid-up.
Record the above in the company's Journal and prepare the Balance Sheet.
(Ans.:Capital Reserve--* 2,000; Balance Sheet Total2,02,000.]
Forfeiture and Reissue of Shares which were Issued at Premium
73. Ashare of k100issued at a premium of 10on which 80 (including premium) was called and 60
(incuding premium) was paid, has been forfeited. This share was afterwards reissued as fuly paid-up for
R70.Give Journal entries to record the above. [Ans.: Capital Reserve- 20.]
74. Pass Journal entries in the following cases:
NK Ltd. forfeited 200 Equity Shares of R10 each, issued at a premium of 5per share, held by Ram for
non payment of the finalcall of 3per share. Of these, 100 shares were reissued to Vishu at a discount of
4 pershare. [Ans.: Capital Reserve- 300.]
75. The Directors of acompany forfeited 300shares of 10 each issued at apremium of ?3 pershare, for the
non-payment of the first call moneyof 2 per share. The final call of 2 per share has not been made. Half
the forfeited shares were reissued at 1,500 as fully paid-up. Record the Journal entries for the forfeiture
andreissue of shares. (Foreign &Delhi 2009)
[Ans.: Capital Reserve-900.]
76. XLtd. forfeited 100 shares of R10 each R 8 called-up) issued at a premium of 2 per share to Rahul
on which he had paid application money of 5 per share, for non-payment of allotment money of
R5 per share (including premium). Out of these, 70 shares were reissued to Sanjay for 7per share as
R8called-up for 7 per share. Give necessary Journal entries relating to forfeiture and reissue of shares.
[Ans.: Capital Reserve 280.)
77. 150 shares of 10 each issued at a premium of 4 per share payable with allotment were forfeited for
non-payment of allotment money of 8 per share including premium. The first and final call of 4 per share
was not made. Theforfeited shares were reissued at 15 per share fully paid-up.
Pass Journal entries in the books of X Ltd. for the above. (NCERT, Modified)
[Ans.:Capital Reserve 300.]
78. JCV Ltd., forfeited 200 shares of 10 each issued at a premium of 2 per share for the non-payment of
allotment money of 3 per share (including premium). The first and final call of 4 per share has not been
made as yet. 50% of theforfeited shares were reissued at 8 per share as fully paid-up. Pass necessary
Journal entries for the forfeiture and reissue of shares. (Delhi 2011 C)
(Ans.: Capital Reserve-300.]
79. Pass necessary Journal entries in the books of the company for the following transactions:
Vishesh Ltd. forfeited 1,000 Equity Shares of? 10 each issued at apremium of 2per share for non-payment
of allotment money of 5 per share including premium. The final call of ? 2 per share was not yet called on
these shares. Oftheforfeited shares 800 shares were reissued at 12 per share as fuly paid-up. The remaining
shares were reissued at 11 per share fully paid-up. (Delhi 2013 )
[Ans.: Capital Reserve-5,000.]
80. Gaurav applied for 5,000shares of ? 10 each at a premium of 2.50per share. But he was allotted 2,500 shares on
proratabasis. After having paid? 3per share orn application, he did not pay allotment money of 4.50 per share
(including premium) and on his subsequent failure to pay the first call of 2 per share, his shares were forfeited.
These shares were reissued at the rate of 8 per share credited as fuly paid.
Pass Journalentries to record the forfeiture and reissue of shares.
[Ans.: Allotment money due but not received--* 3, 750;
Forfeited Shares A/c Credited-12,500; Capital Reserve--7,500.]
81. Amal had applied for 7,000 shares of R10each at a premium of ? 5 per share. He was allotted 4,000 shares
on pro rata basis. After having paid 3per share on application, he did not pay allotment money of
I7 per share (including premium) and on his subsequent failure to pay the first call of 3 per share, his
shares were forfeited. Calis not received were transferred to Calls-in-Arrears Account. These shares were
reissued at the rate of 8 per share credited as fully paid.
Pass Journal entries to record the forfeiture and reissue of shares.
[Ans.: Allotment money due but not received 19, 000;
Forfeited Shares A/c Credited21,000; Capital Reserve- 13,000.]
 each at a premium of 5 per
82. Telecom Ltd' issued 20,000 Equity Shares of ? 10
5 on allotmentandthe balance after
three
months of
share, payable
(7 (including premium) on application,
Ashareholder to whom 200shares were
allotted failed to pay the allotment andIcall
were forfeited. 160 of the forfeited shares were
reissued for? 1,600.
al lotrsnhaetrety
money and ris
Ledger Accounts and the Balance Shees
Pass necessary entries incompany's Journal, prepare Reserve-320; Balance Sheet Total
[Ans.: Balance of Forfeited Shares Alc- 80; Capital
Healthy Foods Ltd. had authorised capital of 50,00,000, 5,00,000 equity
shares of? 10 each 3,00,090
83. equity shares for subscription at a premium of 20% payable 4 on application, ? 5 on allotrnent
balance as first and final call. The shares were subscribed, and due amounts were
received l
iexcepts ued:3,7504
money on 25,000 shares. These shares were forfeited. Later these shares
were reissued at 7 allotrnert
paid up ard
S0,000 were transferred to Capital Reserve. First and final call was demanded from the shareholders, and
was received except on 10,000 which was transferred to Calls-in-Arrears Account.
Pass the Journal entries for forfeiture, reissue of forfeitedshares and first and final call.
[Ans.: Amount received on reissue of shares-
84. Panasonic Ltd. was formed on 1st April, 2010 with an authorised capital ofR 2,00,000, dividedib.
1,25,00,
2,000 Equity Shares of 100 each. 1,000 shares were issued as fully paid to the vendors of building o
payment of the purchase consideration. The remaining 1,000 shares were offered for public subscriotite
at a premium of 5 per share payable as:
On Application ? 10per share,
On Allotment 7 25 per share (including premium),
On First Call 40per share,
On Final Call 30 per share.
Applications were received for 900 shares which were duly allotted and the allotment money was receivet
in full. At the time of the first call, a shareholder who held 100 shares failed to pay the first call money and
his shares were forfeited. These shares were reissued @60 per share, 70 per share paid-up. Final call has
not been made.
You are required to (i) give necessary Journal entries to record the above transactions and (i) show how
share capital would appear in the Balance Sheet of the company.
[Ans.: Capital Reserve 2,000; Balance Sheet Total- 1,69, 500.
85. VXN Ltd. invited applications for issuing 50,000 equity shares of 10 each at a premium of ?8 per Snaie
Theamount was payable as follows:
On Application {4 per share (Including 2 premium):
On Allotment
{6 per share (Including 3 premium);
On First Call
R5 per share (Including 1 premium); and
On Second and Final Call Balance Amount.
The issue was fully subscribed. Gopal, a shareholder holding 200 shares, did not pay the allotment money
and Madhay, a holder of 400 shares, paid his entire share money along with the allotment money. Gopals
shares wereimmediately forfeited after allotment. Afterwards, the first call was made. Krishna, a holderof
100 shares, failed to pay the first call money and Girdhar, a holder of 300 shares, paid the second call money
final
also along with the first call. Krishna's shares were Secondannd
call was made afterwards and was duly received.forfeited immediately
All the forfeited sharesafterwere first call. at 9 pershare
the reissued
fully paid-up.
(0D 2017
Pass necessary Journalentries for the above
transactions the books of the company.
in Call-750
[Ans.: Anmount Forfeited (after First
Allotment)400; Amount forfeited (after
Amount transferredto Capital Reserve600; Money Received onn Allotment-
-302000)