Question

M Ltd. forfeited 5,000 equity shares of ₹10 each issued at a premium of 10% for non-payment of the final call of ₹2 per share. The minimum amount at which these shares can be reissued as fully paid up will be:

• A. \rupee 5,000
• B. \rupee 10,000
• C. \rupee 12,000
• D. \rupee 5,000

Hint:

Forfeited shares must be reissued at a price that covers the unpaid amount on the shares, ensuring no loss is incurred on the reissue.

Answer 1

The Correct Option is B

Step 1: Calculate the unpaid amount on forfeited shares:
The unpaid amount per share is the final call of ₹2.
Total unpaid amount for 5,000 shares: \[ \text{Unpaid Amount} = 5,000 \times ₹2 = ₹10,000 \] Step 2: Determine the minimum reissue price:
The minimum amount at which the shares can be reissued as fully paid up must cover the unpaid amount: \[ \text{Minimum Reissue Price} = ₹10,000 \] Conclusion:
The minimum amount at which the forfeited shares can be reissued is \( ₹10,000 \).