In other words, the premium is the amount over and above the face value of a share. Requirements may include paying an allotment or call money owed, or avoiding selling or transferring shares during a restricted. Discuss the law relating to forfeiture of shares and. The re issue of forfeited shares is treated as re sale and not the allotment, and therefore, no return of allotment of re issue of forfeited shares need be filed with the registrar of companies. Accounting treatment for reissue of forfeited shares accounting.
Ts grewal solutions for class 12 accountancy company account accounting for share capital volume ii question 1. But, the company can forfeit shares only if the article of association of the company allow forfeiture. Capital a c being forfeited shares reissued at discount reissue of shares. This document is highly rated by b com students and has been viewed 1112 times. This pdf file for class 12 accounts subjects reissue of forfeited shares topic contains brief and concise notes for easy understanding of. You can see some ppt forfeiture and reissue of shares part 2 sample questions with examples at the bottom of this page. F ltd forfeited 200 equity shares of rs 100 each issued at a premium of 10 for non payments of first call of rs 25 and final call of rs 15 of these 150 shares were reissued for rs 90 share give journal entries for forfeiture and reissue of shares accounts ac entries.
Reissue forfeiture of shares case 2 when shares are reissued at 29. Ca foundation ppt forfeiture and reissue of shares part 2 summary and exercise are very important for perfect preparation. Manoj comes and pleads with the company to cancel the forfeiture of shares after the reissue of the forfeited shares to mr. From the following particulars, journalise the transactions for third call, forfeiture and reissue of shares. When the same shares are reissued, discount on issue of.
Forfeited shares may either be cancelled or reissued. Introduction to forfeiture and reissue of shares 2. Introduction of icai mp3 podcast cpt accounting forfeiture and reissue of shares. Generally, the shares will be reissued at a discount. Such shares once forfeited can be reissued to any person within reasonable time and at reasonable price. Terms of issue of shares i issue of shares at par when shares are issued at their face value, the shares are said to have been issued at. If you continue browsing the site, you agree to the use of cookies on this website. Reissue of forfeited shares accounts class 12 notes. Section 53 of the companies act, 20 prohibits issue of equity shares at a discount.
Accounting for share capital important questions for cbse class 12 accountancy accounting treatment of issue shares. Apr 02, 2020 forfeiture and reissue of shares advanced corporate accounting b com notes edurev is made by best teachers of b com. Issue, forfeiture and reissue of shares slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Reissue of forfeited shares at par, premium and discount.
The maximum amount of discount on reissue of forfeited shares is that the amount of discount allowed cannot exceed the amount that had been received on forfeited shares on their original issue and that the discount allowed on re issue of forfeited shares should be debited to the share forfeited. New share issue share rights issue forfeiture and reissue of shares payment of dividends each question is independent of the other questions. May 02, 2016 forfeiture of shares shareholder fails to pay the called up money on allotment and further calls. Forfeiture and reissue of shares advanced corporate. Introduction, forfeiture of shares, reissue of shares, issue of bonus shares, rights issue, share split, buy back of shares, redemption of preference shares, debentures financial accounting notes pdf.
Reissue of shares 3 understand the concept and accounting treatment of callinarrears and callinadvance. Issue forfeiture of shares financial capital capital surplus. Shares are forfeited, the title of such shareholder is extinguished but the amount paid is not refunded to him. Discount on reissue to share capital ac being forfeited shares reissued at discount reissue of shares originally issued at discount at a discount this topic is irrelevant now. Dec 23, 2019 free pdf download of cbse accountancy multiple choice questions for class 12 with answers chapter 7 issue of shares. The maximum discount, however, will be restricted to the amount received on forfeiture of such shares plus their original discount if any. Journalise the entry for reissue of shares whether at discount or at premium. Introduction to issue forfeiture and reissue of shares preferred. Icai mp3 podcast cpt accounting forfeiture and reissue of shares is available at.
A forfeited share is a share in a company that the owner loses forfeits by failing to meet the purchase requirements. According to section 284 of the companies act, 20 share means a share in the share capital of a company and includes stock. Journal entries on forfeiture or surrender and reissue of shares 3. Issue forfeiture of shares financial capital capital.
Proprietor sole proprietor partnership partners company. Thus, discount ac is credited by the amount of discount allowed at the time of issue. Case 2 when shares are issued originally at premimum not received forfeiture of shares 27. Ac share capital ac cr share premium ac cr being bonus utilised for issue of bonus shares at premium forfeiture and reissue of shares by becoming a shareholder a person enters into a contract with the company that he is liable. Forfeiture of shares conditions procedure annulment. Capital funds provided by the owners into a business is known as capital. Issue forfeiture of shares free download as powerpoint presentation. Public applied for 4,50,000 shares and allotment was made to.
Dec 07, 2016 forfeiture and reissue of shares new anurag classes. Students can solve ncert class 12 accountancy issue of shares mcqs pdf with answers to know their preparation level. Share forfeiture is the process by which the directors of a company cancel the power of a shareholder if he does not pay his call money when the company demands. Forfeiture of shares free download as powerpoint presentation. The issue of shares at premium refers to the issue of shares at a price higher than the face value of the share. Accounting entries regarding reissue of forfeited shares.
If a shareholder fails in their obligations then they could lose their entitlement to the shares they own. Day 34 forfeiture and reissue of shares class 12 accounting of. The excellent and good quality audio file is in the format of mp3. But my further question is what is the further procedure i. After reissue of forfeited shares, balance amount of share forfeiture ac is transferred to capital reserve ac because it is a capital profit. Scribd is the worlds largest social reading and publishing site. Jun 29, 20 29 june 20 in case of reissue of forfeited shares by a private limited company, it is true that a board resolution will suffice. Forfeiture and reissue of shares which are originally issued at par, golden rule easy method, sl examples, t. Forfeiture of shares debits and credits financial economics. The reissue can be done at par, premium or discount. Till the time the company reissues the forfeited shares, it adds the balance of the forfeited shares account to paidup capital under subscribed capital in the notes to accounts on share capital. Capital ac being forfeited shares reissued at discount reissue of shares. In this case, following journal entry is to be passed.
In this article we will discuss about the forfeiture and reissue of shares. Accountancy class 12 class 12 notes edurev is made by best teachers of class 12. Call money was received in full, except from the above persons. This document is highly rated by ca foundation students and has been viewed 597 times.
Unlimited downloads book pdf notescharts unlimited demo video lecture access. Forfeiture of shares is the action taken by a company to cancel the shares. Issue, forfeiture and reissue of shares learning outcomes issue of prospectus inviting applications for shares from the public. Issue and forfeiture and reissued of shares preferred stock. The title of the purchaser to the forfeited shares is not affected by any irregularity or invalidity in the forfeiture or sale of the shares. If shares originally issued at discount, the discount allowed was written back at the time of their forfeiture is again allowed. Not all of these areas have been covered in the equity topic in accounting method ii. This document is highly rated by class 12 students and has been viewed 1680 times. Reissue of forfeited shares part 1 important for ugc net. The ownership of a company is broken into units we know as shares. A company can forfeit the shares only if it is authorized by its articles accounting treatment forfeiture of shares which were issued at par. The certificate of incorporation of a company is issued by registrar of. Requirements may include paying an allotment or call money.
The secretary shall prepare a list of defaulters i. Forfeiture of shares under companies act, 20 with various illustrations by ankita mamtani. Accountancy mcqs for class 12 with answers chapter 7 issue of. Financial accounting pdf notes, syllabus 2020 bba, bcom. At times the directors of the company may decide to reissue the shares forfeited. Accounting for share capit al share and share capital. He pleads that he has resolved his financial problems and can now pay the call on shares along with any interest due on the calls. Sometimes on nonpayment of call money, we see forfeiture and reissue of shares. Introduction of issue forfeiture and reissue of shares.
In this article we will discuss about the accounting treatment for reissue of forfeited shares, explained with the help of suitable illustrations. Failure to pay call money results in forfeiture of shares. Nature and types a company is an artificial person created by law, having separate entity with a perpetual succession and a common seal. Record the journal entries for forfeiture and reissue of. Issue of shares by cacma santosh kumar download chapter pdf from description. Being part of shareholders funds we show it under equity and liabilities part of the balance sheet. Record the journal entries for forfeiture and reissue of shares in the following cases. Forfeiture and reissue of shares for b com class 2 duration. Deal with the forfeiture of shares issued with different conditions. Notes on share forfeiture and reissue of forfeited shares. Forfeiture and reissue of shares for b com class 2 youtube.
Issueforfeiture and reissue of shares issueforfeiture and. Apr 19, 2017 ca foundation ppt forfeiture and reissue of shares part 2 summary and exercise are very important for perfect preparation. Feb 05, 2018 a forfeited share is a share in a company that the owner loses forfeits by failing to meet the purchase requirements. Issueforfeiture and reissue of shares issueforfeiture. Student will get link to download pdf notes in the 2nd class of the course under material tab. Feb 12, 2017 forfeiture and reissue of shares for b com class 2 gagan kapoor.
Regarding reissue of forfeited shares accounting entries. If a shareholder fails to pay allotment money or a call or. Forfeiture and reissue of shares for b com class 2 gagan kapoor. Forfeiture of shares and its effects an analysis ipleaders. Reissue of forfeited shares share forfeiture ac 30. But in no case, the amount collected on the reissue of such shares plus the amount already forfeited be less than the amount credited as paid upon reissue of shares. Introduction to issue forfeiture and reissue of shares free download as pdf file. The directors then forfeited these shares and reissued 1,000 shares, as fully paid, for rs. Understand the concept and accounting treatment of call inarrears and callin advance. The procedure for the forfeiture of shares is likely to be different depending on the reason for forfeiture arising and what the articles state.
Therefore, no return of allotment is required to be filed with roc by a company at the time of reissue or disposal of forfeited shares. Issue of shares by cacma santosh kumar download chapter pdf from. Icai mp3 podcast cpt accounting forfeiture and reissue of. Ts grewal solutions for class 12 accountancy company. Continuing with the previous illustration, after the shares are reissued to pragya, ketan applies to the company to cancel the forfeiture and reissue the shares back to him. Issue of shares by cacma santosh kumar download chapter. Forfeiture and reissue of shares new anurag classes. Click here to view, download or print flexiprep exclusive reissue of forfeited shares part 1. Ketan applies to the company to cancel the forfeiture and reissue the shares back to. The forfeiture of shares does not amount to reduction of share capital since at any time, the board of directors are having the power to reissue the forfeited subject to the articles of association and none of modes of the reduction of capital as per section 100 of companies act, 1956 is applicable to the forfeiture of shares. Prorata based forfeiture and reissue of shares type2 simplified approch.
Understand the concept and accounting treatment of callinarrears and callin advance. Usually, the companies that are financially strong, have a good reputation in the market or have profitable future prospects, receive oversubscription of shares. Forfeiture and reissue of shares for b com class 2. For this reason, the forfeiture or shares is most likely to be carried out by public limited companies rather than by private companies. Share forfeiture ac dr to capital reserve ac when shares are reissued at premium, premium on reissue is transferred to share premium ac. The forfeited shares can be reissued by the company at any price. Apr 07, 2020 ppt forfeiture and reissue of shares part 2 ca foundation notes edurev is made by best teachers of ca foundation. A company may receive applications for shares more than the number of shares it has offered to the public. Doubt in forfeiture and reissue of shares accounts forum. The conditions of forfeiture of shares are forfeiture of shares issued at par, forfeiture of shares issued at discount and forfeiture of shares issued at premium. Accounting method ii assignment share issues this assignment comprises four questions all dealing with share issue topics. However, in the case of forfeited shares, they had already been allotteed and they had come into existence at the time of their allotment and their forfeiture is a proof of their existence.
Day 34 forfeiture and reissue of shares class 12 accounting of share capital. Issue and forfeiture of shares academy of accounts. The following procedure must be followed for forfeiture of shares. The company offered for public subscription all the shares.
Issue and forfeiture and reissued of shares free download as powerpoint presentation. These shares represent a part of the company, so the shareholder becomes a part owner. This article aims to outline the process of forfeiture of shares as well as the main circumstances surrounding the forfeiture. Jun 28, 20 28 june 20 hi reissue of forfeited shares where a company had lien on fully paid shares belonging to the deceased shareholder, it is obligatory on the company to give notice of its sale to the legal representative of the deceased shareholder, but if this is not done the sale would nevertheless be a valid sale. The board of directors of the company is empowered to reissue the forfeited shares if authorized by its articles. Shares can be cancelled and amount already paid may be forfeited. Accounting for share capital class 12 accountancy extra questions. Usually, the companies that are financially strong, well managed and have a good reputation in the market issue their shares at a premium. Prorata based forfeiture and reissue of shares type2. Out of these, 15 shares were reissued to naresh as rs 7 per share paid up for rs 8 per share. This document is highly rated by ca foundation students and has been viewed 1040 times. This cannot happen because the board of directors has the power to cancel the forfeiture only before the disposal or reissue of shares as per regulation 312 of table f, schedule i of companies act, 20. If any shareholder is not able to pay the amount of call, the company may exercise the power to forfeit his shares. Reissue of forfeited shares by a private company resolved.