Question

Ronaldo Ltd. forfeited 300 equity shares of ₹10 each, fully called up, on which ₹5 per share (including premium of ₹1 per share) was received. It later reissued these shares at a discount.
The maximum discount per share, which the company could have given on their reissue would be:

Options

• ₹6 per share

• ₹5 per share

• ₹4 per share

• ₹3 per share

Answer 1

₹4 per share

Explanation:

When forfeited shares are reissued, maximum discount allowed = amount already received on those shares (excluding premium).

Face value of each share = ₹10

Premium per share = ₹1

Total called-up per share = ₹10 (face value) + ₹1 (premium) = ₹11

Received per share = ₹5 (includes premium of ₹1)

Amount received towards capital

= ₹5 – ₹1

= ₹4