In the Books of Radhika Ltd. Journal
Date		Particulars			L.F.	Debit (₹)	Credit  (₹)
		Bank A/c (39,000×40)		Dr.		15,60,000
		To Equity Share Application and Allotment A/c					15,60,000
		(Being Application for 39,000 shares were received₹40 per share including ₹10 premium)
		Equity Share Application and Allotment A/c		Dr.		15,60,000
		To Equity Share Capital A/c (39,000×30)					11,70,000
		To S.P.R. A/c (39,000×10)					3,90,000
		(Being Application money transferred for 39,000 shares capital and Securities premium)
		Equity Shares First Call A/c		Dr.		17,55,000
		(39,000×45)
		To Equity Share Capital A/c (39,000×40)					15,60,000
		To S.P.R. A/c  (39,000×5)					1,95,000
		(Being Allotment money due on 39,000 shares @ ₹45 per share including ₹5 premium)
		Bank A/c (39,000-100×45)		Dr.		17,50,500
		Calls-in-Arrears A/c (100×45)		Dr.		4,500
		To Equity Shares First Call A/c (100×45)					17,55,000
		(Being Allotment money received except from 100 shares of Dinu)
		Equity Share Capital A/c (100×70)		Dr.		7,000
		S.P.R. A/c  (100×5)		Dr.		500
		To Forfeited Shares A/c  (100×30)					3,000
		To Calls-in-Arrears A/c  (100×45)					4,500
		(Being 100 shares of Dinu forfeited for non-payment of First call money)
		Bank A/c (100×70)		Dr.		7,000
		Forfeited Shares A/c (100×30)		Dr.		3,000
		To Equity Shares Capital A/c  (100×100)					10,000
		(Being First Call received except on Dinu's 100 shares)

 

Question 64:

Star Ltd. issued 10,000 shares of  ₹10 each, payable as ₹4 on application, ₹3 on allotment, ₹2 on first call and balance on second and final call.

500 shares were forfeited. Calculate the 'Maximum Permissible Discount' and 'Minimum Reissue Price' on reissue in each of the following cases, if the reissued shares are fully paid-up:

Case 1. If shares were forfeited for non-payment of  Second and Final Call.

Case 2. If shares were forfeited for non-payment of  First Call and Second and Final Call.

Case 3. If shares were forfeited for non-payment of  Allotment, First Call land Second and Final Call.

Case 4. If shares were forfeited for non-payment of  Allotment and First Call. Second and Final Call is not yet made.

 

Answer:

Rule for allowing discount on reissue:

As per Company Act, 2013 (Section 53) Discount on reissue can be given up to the extent of  amount forfeited on re-issued shares.

And Reissue price cannot be less than amount received by company on forfeited shares.

 

Case 1. If shares were forfeited for non-payment of  Second and Final Call.

Maximum Permissible Discount - ₹9

Reason: Discount on reissue can be given up to the extent of  ₹9 forfeited on re-issued shares.

Minimum Reissue Price ₹1;

Reason: Reissue price cannot be than ₹1 received by company on forfeited shares.

 

Case 2. If shares were forfeited for non-payment of  First Call and Second and Final Call.

Maximum Permissible Discount - ₹7.

Reason: Discount on reissue can be given up to the extent of  ₹7 forfeited on re-issued shares.

Minimum Reissue Price - ₹3.

Reason: Reissue price cannot be than ₹3 received by company on forfeited shares.

 

Case 3. If shares were forfeited for non-payment of  Allotment, First Call land Second and Final Call.

Maximum Permissible Discount - ₹4.

Reason: Discount on reissue can be given up to the extent of  ₹4 forfeited on re-issued shares.

Minimum Reissue Price - ₹6.

Reason: Reissue price cannot be than ₹6 received by company on forfeited shares.

 

Case 4. If shares were forfeited for non-payment of  Allotment and First Call. Second and Final Call is not yet made.

Maximum Permissible Discount - ₹4.

Reason: Discount on reissue can be given up to the extent of  ₹4 forfeited on re-issued shares.

Minimum Reissue Price – ₹6

Reason: Reissue price cannot be than ₹6 received by company on forfeited shares.