Question

M Ltd. forfeited 5,000 equity shares of \rupee10 each issued at a premium of 10\% for non-payment of the final call of \rupee2 per share. The minimum amount at which these shares can be reissued as fully paid up will be:

• A. \rupee5,000
• B. \rupee10,000
• C. \rupee12,000
• D. \rupee50,000

Hint:

For reissued forfeited shares, ensure the minimum price covers the unpaid amount while considering any premium or discount adjustments.

Answer 1

The Correct Option is B

The shares were forfeited for non-payment of the final call of \rupee2 per share. The total unpaid amount is: \[ \text{Unpaid Amount: } 5,000 \times \rupee2 = \rupee10,000. \] As per the rules of forfeiture, the minimum reissue price must cover the unpaid amount. Therefore, the minimum amount at which the forfeited shares can be reissued as fully paid up is \rupee10,000. Thus, the minimum reissue price is \rupee10,000.