Accounting For Share Capital

Step 1: Face value of shares.
500 shares of Rs. 10 each = Rs. 5,000.

Step 2: Reissue price.
Shares reissued at Rs. 8 per share = Rs. 4,000.

Step 3: Discount on reissue.
Discount = Rs. 5,000 (face value) – Rs. 4,000 (reissue price) = Rs. 1,000.

Step 4: Adjustment from Share Forfeiture A/c.
The maximum discount on reissue can be adjusted from Share Forfeiture Account. Therefore, Rs. 1,000 will be debited to Share Forfeiture A/c.

Final Answer:

Step 1: Forfeiture amount earlier credited.
Application money received on 500 shares = Rs. 5 per share = Rs. 2,500. Thus, Share Forfeiture A/c had Rs. 2,500.

Step 2: Discount allowed on reissue.
Discount on reissue = Rs. 1,000 (already adjusted).

Step 3: Remaining balance in Forfeiture A/c.
Remaining = Rs. 2,500 – Rs. 1,000 = Rs. 1,500.

Step 4: Profit transfer.
This balance is profit on reissue of forfeited shares and is transferred to Capital Reserve. Therefore, amount transferred = Rs. 1,500.

Final Answer:

Step 1: Calculate total application money received on forfeited shares.
Application money = Rs. 5 per share (including premium).
For 500 shares = .

Step 2: Treatment of premium.
Premium portion of application money is not transferred to forfeiture; only actual capital portion is considered. However, here the application (including premium) was fully received and credited, so the amount forfeited equals the actual received on those shares.

Step 3: Call default and forfeiture.
Since the shareholder defaulted at the call stage, the money already paid (application + allotment) stays with the company and is credited to Share Forfeiture A/c. But in this case, the problem specifies only application money was paid, while call was unpaid. Hence, forfeiture amount = Rs. 2,500.

Final Answer:

Step 1: Forfeiture of shares.
- Face value of shares = Rs. 100 each - Number of forfeited shares = 200 - Amount not paid (final call) = Rs. 30 per share - Amount paid = Rs. 70 per share

Step 2: Reissue of shares.
- 150 shares reissued at Rs. 60 each. - Face value = Rs. 100 each, so discount on reissue = Rs. 40 per share. - Total discount = .

Step 3: Treatment of forfeited amount.
- Forfeited amount for 150 shares = . - Out of this, Rs. 6,000 is used to cover discount on reissue. - Balance = transferred to Capital Reserve.

Final Answer:

Step 1: Provisions of Table A.
When a company does not have its own Articles of Association, Table A of the Companies Act applies. It specifies that: - At least 1 month gap must be between two calls.
- No call should exceed 25% of face value.
- Minimum 7 days' notice required.
- Calls must be uniform for all shares of the same class.

Step 2: Correct set.
Thus, all four provisions (A, B, C, D) are correct.

Final Answer: