Company Accounts

Share Capital

Medium

Comprehension:

Read the following passage carefully and answer the questions.

X ltd. issued 30,000 shares to the public having Face value ₹ 100 at 10% premium. Money is receivable as follows:

Application = ₹ 40 (including premium)

Allotment = ₹ 45

First and Final call = Remaining amount

The public applied for 50,000 shares. The company rejected application for 10,000 shares and made a pro rata allotment to the rest of the applicants. A shareholder applying for 400 shares, didn’t pay the allotment and call money and his allotted shares were forfeited by the company. Later, the forfeited shares were reissued at ₹ 80 each as fully paid.

What is the amount of discount per share which is allowed by the company at the time of reissue of forfeited shares?

₹ 80

₹ 40

₹ 20

₹ 10

✅ Correct Option: 3

Face value per share = ₹100

Premium = 10% of ₹100 = ₹10

Issue price = ₹100 + ₹10 = ₹110

Money receivable per share:

Application = ₹40 (including ₹10 premium)
Allotment = ₹45
First and Final Call = ₹110 - ₹40 - ₹45 = ₹25

The shareholder who applied for 400 shares received allotment on pro rata basis.

Pro rata ratio = 30,000 shares allotted : 40,000 shares applied (after rejection of 10,000) = 3:4

Shares allotted to this shareholder = 400 × $\frac{3}{4}$ = 300 shares

This shareholder paid only application money and the shares were forfeited.

At the time of reissue:

Reissue price = ₹80 per share (as fully paid up)

Face value = ₹100 per share

Discount allowed = Face value - Reissue price

Discount = ₹100 - ₹80 = ₹20 per share

Note: The discount of ₹20 is within the permissible limit as the forfeited amount is ₹40 per share (application money paid), which is greater than the discount allowed.

2026: 11 May Shift 2

Antra Ltd. invited applications for 30,000 Shares of Rs. 100 each at a premium of Rs. 30 per share payable as follows: On Application Rs. 40 (including Rs.10 premium), On Allotment Rs. 30 (including Rs.10 premium), On First Call Rs. 30, On Second and Final Call Rs. 30 (including Rs.10 premium). Applications were received for 35,000 shares and a pro rata allotment was made. Excess application money was utilized towards the sum due on allotment. Vijaya to whom 60 shares were allotted, failed to pay the allotment money and his shares were forfeited immediately after allotment.

Allotment money not received on Vijaya's shares will be:

2026: 29 May Shift 2

The director of Shah Ltd. resolved that 250 equity shares of Rs.100 each be forfeited for non-payment of the second and final call of Rs.30 per share. Out of these, 180 shares were re-issued at Rs.60 per share. The amount to be transferred to capital reserve account will be:

2025: 2 June Shift 2

Which of the following statements are true with reference to a "company"?

(A) The directors of the company are the owners of the company.

(B) A company is an artificial person.

(D) The liability of the members of the company is limited to the extent of shares held by them

Choose the correct answer from the options given below:

2026: 6 June Shift 1

Which of the following are related to forfeiture of shares issued on premium :

(A) Share capital is debited with called up amount

(B) Calls in Advance is credited

(D) Premium received on such Shares is debited, if it is received

Choose the correct answer from the options given below:

2025: 13 May Shift 2

Which statements are correct-

(A) A company's shares are generally transferable.

(B) Shareholders of a company are liable for the acts of the company.

(D) Paid up capital can exceed called up capital.

Choose the correct answer from the options given below:

2025: 15 May Shift 1

Securities Premium Account can be used only for the following purposes:

(A) To issue partly paid bonus shares to the extent not exceeding unissued share capital of the company;

(B). Buy back of own shares.

(C). To write-off the expenses of, or commission paid, or discount allowed on any securities of the company;

(D). To pay premium on the redemption of preference shares or debentures of the company.

Choose the correct answer from the options given below:

What is the amount of discount per share which is allowed by the company at the time of reissue of forfeited shares?

Solution

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