Question

Ruby limited invited applications for 1,00,000 shares of ₹10 each at a premium of 30% payable as follows: On Application ₹4 On Allotment ₹5 On First Call ₹2 On Second and Final Call ₹2 The public subscribed for two times the shares that were offered by the company. The directors decided to allot the shares to all the applicants on a pro-rata basis. Santosh who had applied for 6,000 shares, did not pay anything after the Application. Her shares were forfeited after the final call. 50% of the forfeited shares were reissued to Ashok as fully paid in such a manner that ₹1,500 were transferred to Capital Reserve A/c.

At what price were the forfeited shares reissued?

पर्याय

• ₹6 per share

• ₹5 per share

• ₹4 per share

• ₹3 per share

• ₹7 per share

Answer 1

₹7 per share

Explanation:

Given:

Face Value = ₹10
Premium = ₹3 (30% of ₹10)
Total Issue Price = ₹13 per share

Santosh applied for 6,000 shares, so she was allotted: 

`1/2 xx 6,000`

= 3,000 shares

Santosh paid only on application → ₹4 per share

For 3,000 shares, she paid:

3,000 × ₹4 = ₹12,000

She did not pay:

• ₹5 on allotment (₹2 capital + ₹3 premium)
• ₹2 first call
• ₹2 final call
• Total unpaid = ₹9 per share

All 3,000 shares allotted to Santosh were forfeited after final call.

Amount forfeited per share = ₹4

Total forfeited = ₹4 × 3,000 = ₹12,000

50% of 3,000 = 1,500 shares

Amount transferred to Capital Reserve = ₹1,500

Capital Reserve = Forfeited Amount − Discount on Reissue

Forfeited amount on 1,500 shares = 1,500 × ₹4 = ₹6,000

Face value = ₹10

Discount = ₹10 − x

6,000 − 1,500 × (10 − x) = 1,500

1,500 × (10 − x) = 4,500

10 − x `= (4,500)/(1,500) = 3`

x = 10 − 3

= ₹7