Introduction to issue forfeiture and reissue of shares preferred. 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. The maximum discount, however, will be restricted to the amount received on forfeiture of such shares plus their original discount if any. Ts grewal solutions for class 12 accountancy company. Understand the concept and accounting treatment of callinarrears and callin advance. Case 2 when shares are issued originally at premimum not received forfeiture of shares 27.
Public applied for 4,50,000 shares and allotment was made to. Issue forfeiture of shares financial capital capital. Accounting entries regarding reissue of forfeited shares. Forfeiture of shares and its effects an analysis ipleaders. Day 34 forfeiture and reissue of shares class 12 accounting of share capital. Capital ac being forfeited shares reissued at discount reissue of shares. This article aims to outline the process of forfeiture of shares as well as the main circumstances surrounding the forfeiture. You can see some ppt forfeiture and reissue of shares part 2 sample questions with examples at the bottom of this page. Issueforfeiture and reissue of shares issueforfeiture and.
Reissue of forfeited shares accounts class 12 notes. If a shareholder fails to pay allotment money or a call or. 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. Issueforfeiture and reissue of shares issueforfeiture. Forfetire and reissue of shares 10 note a public limited company cannot make any allotment of shares unless the amount of minimum subscription stated in the prospectus has been subscribed and the sum payable as application money for such shares has been paid to and received by the company. Shares are forfeited, the title of such shareholder is extinguished but the amount paid is not refunded to him. Forfeiture of shares means cancellation of shares due to nonpayment of allotment money or call money within a specified period. If shares originally issued at discount, the discount allowed was written back at the time of their forfeiture is again allowed. Regarding reissue of forfeited shares accounting entries. Ts grewal solutions for class 12 accountancy company account accounting for share capital volume ii question 1. Dec 23, 2019 free pdf download of cbse accountancy multiple choice questions for class 12 with answers chapter 7 issue of shares.
Student will get link to download pdf notes in the 2nd class of the course under material tab. Forfeiture and reissue of shares for b com class 2. 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. 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. Manoj comes and pleads with the company to cancel the forfeiture of shares after the reissue of the forfeited shares to mr.
Financial accounting pdf notes, syllabus 2020 bba, bcom. 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. Unlimited downloads book pdf notescharts unlimited demo video lecture access. A company may receive applications for shares more than the number of shares it has offered to the public. Accounting for share capital important questions for cbse class 12 accountancy accounting treatment of issue shares. Capital a c being forfeited shares reissued at discount reissue of shares. Forfeiture and reissue of shares for b com class 2 youtube. A company can forfeit the shares only if it is authorized by its articles accounting treatment forfeiture of shares which were issued at par. Easy way commerce classes by tabita massey 4,536 views. This document is highly rated by ca foundation students and has been viewed 1040 times. The board of directors of the company is empowered to reissue the forfeited shares if authorized by its articles. New share issue share rights issue forfeiture and reissue of shares payment of dividends each question is independent of the other questions.
Record the journal entries for forfeiture and reissue of. Issue and forfeiture and reissued of shares free download as powerpoint presentation. Issue of shares by cacma santosh kumar download chapter. Click here to view, download or print flexiprep exclusive reissue of forfeited shares part 1. Proprietor sole proprietor partnership partners company. Introduction of icai mp3 podcast cpt accounting forfeiture and reissue of shares. Forfeiture of shares under companies act, 20 with various illustrations by ankita mamtani. 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. Out of these, 15 shares were reissued to naresh as rs 7 per share paid up for rs 8 per share. Prorata based forfeiture and reissue of shares type2 simplified approch. Call money was received in full, except from the above persons.
Share forfeiture ac dr to capital reserve ac when shares are reissued at premium, premium on reissue is transferred to share premium ac. Icai mp3 podcast cpt accounting forfeiture and reissue of. From the following particulars, journalise the transactions for third call, forfeiture and reissue of shares. Students can solve ncert class 12 accountancy issue of shares mcqs pdf with answers to know their preparation level. Feb 12, 2017 forfeiture and reissue of shares for b com class 2 gagan kapoor. 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. Reissue of shares 3 understand the concept and accounting treatment of callinarrears and callinadvance. Accounting method ii assignment share issues this assignment comprises four questions all dealing with share issue topics.
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. Reissue of forfeited shares at par, premium and discount. Day 34 forfeiture and reissue of shares class 12 accounting of.
For this reason, the forfeiture or shares is most likely to be carried out by public limited companies rather than by private companies. Accountancy mcqs for class 12 chapter wise with answers pdf download was prepared based on latest exam pattern. Forfeiture and reissue of shares advanced corporate. Thus, discount ac is credited by the amount of discount allowed at the time of issue. The reissue can be done at par, premium or discount. The company offered for public subscription all the shares. Forfeited shares may either be cancelled or reissued. 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. Hi friends, on this page, i am sharing the class 12th notes and ebook on the topic reissue of forfeited shares of the subject accounts. This document is highly rated by class 12 students and has been viewed 1680 times. Issue, forfeiture and reissue of shares slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising.
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 and reissue of shares for b com class 2 gagan kapoor. Forfeiture of shares free download as powerpoint presentation. According to section 284 of the companies act, 20 share means a share in the share capital of a company and includes stock. This document is highly rated by b com students and has been viewed 1112 times. Understand the concept and accounting treatment of call inarrears and callin advance. In other words, the premium is the amount over and above the face value of a share. Forfeiture and reissue of shares which are originally issued at par, golden rule easy method, sl examples, t. Requirements may include paying an allotment or call money. Being part of shareholders funds we show it under equity and liabilities part of the balance sheet. Discuss the law relating to forfeiture of shares and. Introduction to forfeiture and reissue of shares 2. Reissue of forfeited shares share forfeiture ac 30. The issue of shares at premium refers to the issue of shares at a price higher than the face value of the share.
Journal entries on forfeiture or surrender and reissue of shares 3. The secretary shall prepare a list of defaulters i. This document is highly rated by ca foundation students and has been viewed 597 times. Forfeiture of shares is the action taken by a company to cancel the shares. The ownership of a company is broken into units we know as shares. Doubt in forfeiture and reissue of shares accounts forum. Failure to pay call money results in forfeiture of shares. Accounting for share capit al share and share capital. 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. Reissue forfeiture of shares case 2 when shares are reissued at 29.
Issue, forfeiture and reissue of shares learning outcomes issue of prospectus inviting applications for shares from the public. Nature and types a company is an artificial person created by law, having separate entity with a perpetual succession and a common seal. Usually, the companies that are financially strong, have a good reputation in the market or have profitable future prospects, receive oversubscription of shares. Issue forfeiture of shares financial capital capital surplus. Issue of shares by cacma santosh kumar download chapter pdf from. After reissue of forfeited shares, balance amount of share forfeiture ac is transferred to capital reserve ac because it is a capital profit. 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.
The certificate of incorporation of a company is issued by registrar of. 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. Issue and forfeiture of shares academy of accounts. The directors then forfeited these shares and reissued 1,000 shares, as fully paid, for rs. The forfeited shares can be reissued by the company at any price. Forfeiture of shares conditions procedure annulment. Generally, the shares will be reissued at a discount. If a shareholder fails in their obligations then they could lose their entitlement to the shares they own. The procedure for the forfeiture of shares is likely to be different depending on the reason for forfeiture arising and what the articles state. A forfeited share is a share in a company that the owner loses forfeits by failing to meet the purchase requirements.
Accounting for share capital class 12 accountancy extra questions. Scribd is the worlds largest social reading and publishing site. 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. Apr 02, 2020 forfeiture and reissue of shares advanced corporate accounting b com notes edurev is made by best teachers of b com. These shares represent a part of the company, so the shareholder becomes a part owner. Accounting treatment for reissue of forfeited shares accounting.
Ketan applies to the company to cancel the forfeiture and reissue the shares back to. In this case, following journal entry is to be passed. 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. Reissue of forfeited shares part 1 important for ugc net. If any shareholder is not able to pay the amount of call, the company may exercise the power to forfeit his shares.
Forfeiture of share means the cancellation of the shares for nonpayment of calls due. Capital funds provided by the owners into a business is known as capital. Forfeiture and reissue of shares 1 lectures 39 min forfeiture and reissue of shares which are originally issued at premium, golden rule easy method, sl examples, t. Ca foundation ppt forfeiture and reissue of shares part 2 summary and exercise are very important for perfect preparation. Shares can be cancelled and amount already paid may be forfeited. This pdf file for class 12 accounts subjects reissue of forfeited shares topic contains brief and concise notes for easy understanding of. 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 07, 2016 forfeiture and reissue of shares new anurag classes. Notes on share forfeiture and reissue of forfeited shares. Apr 19, 2017 ca foundation ppt forfeiture and reissue of shares part 2 summary and exercise are very important for perfect preparation. 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. Requirements may include paying an allotment or call money owed, or avoiding selling or transferring shares during a restricted.
Sometimes on nonpayment of call money, we see forfeiture and reissue of shares. Accountancy mcqs for class 12 with answers chapter 7 issue of. Forfeiture and reissue of shares new anurag classes. Forfeiture and reissue of shares for b com class 2 duration. Apr 07, 2020 ppt forfeiture and reissue of shares part 2 ca foundation notes edurev is made by best teachers of ca foundation. 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.
Deal with the forfeiture of shares issued with different conditions. Reissue of forfeited shares by a private company resolved. Record the journal entries for forfeiture and reissue of shares in the following cases. But, the company can forfeit shares only if the article of association of the company allow forfeiture. Download and install anurag classes app from playstore. Journalise the entry for reissue of shares whether at discount or at premium. Issue and forfeiture and reissued of shares preferred stock. But my further question is what is the further procedure i. Usually, the companies that are financially strong, well managed and have a good reputation in the market issue their shares at a premium. Being share forfeited account transferred b reissue of forfeited shares originally issued at discount if the shares which were originally issued at a discount are forfeited and reissued, then on reissue the new allottee would get the advantage of discount, besides getting some additional discount from share forfeited account. If you continue browsing the site, you agree to the use of cookies on this website. Forfeiture of shares debits and credits financial economics. When the same shares are reissued, discount on issue of. 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.
Such shares once forfeited can be reissued to any person within reasonable time and at reasonable price. Feb 05, 2018 a forfeited share is a share in a company that the owner loses forfeits by failing to meet the purchase requirements. 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. Prorata based forfeiture and reissue of shares type2. Introduction to issue forfeiture and reissue of shares free download as pdf file. Section 53 of the companies act, 20 prohibits issue of equity shares at a discount. 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. At times the directors of the company may decide to reissue the shares forfeited.
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. The following procedure must be followed for forfeiture of shares. The excellent and good quality audio file is in the format of mp3. Demo lecture of final accounts for class 11th,class 12th,,ca,cma,cs by cacma santosh kumar. Issue of shares by cacma santosh kumar download chapter pdf from description. Icai mp3 podcast cpt accounting forfeiture and reissue of shares is available at. May 02, 2016 forfeiture of shares shareholder fails to pay the called up money on allotment and further calls. Issue forfeiture of shares free download as powerpoint presentation. Accounting treatment for reissue of forfeited shares.
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