Question

A Ltd. forfeited 100 equity shares of Rs 10 each issued at a premium of 20% for the non-payment of final call of  Rs 5 including premium. State the maximum amount of discount at which these shares can be re-issued?

Answer 1

A maximum amount of discount that can be allowed at the time of reissue is the amount received (or paid by) the original shareholder i.e. Rs 7. Rs 5 is called at the time of final call which includes premium amount also. Thus, it means that Rs 7 is received from the shareholder.