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Capital profit on reissue arises on which shares?
AAll shares issued at premium
BOnly forfeited shares reissued
CAll shares forfeited by company
DAll the unforfeited shares
Answer & Solution
Correct answer: B. Only forfeited shares reissued
Only shares that are actually reissued produce a capital profit, not the whole forfeited lot.
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If only some forfeited shares are reissued, capital reserve gets200 shares of Rs. 100 forfeited for unpaid final call of Rs. 30; 150 reissued at Rs. 60 asProfit on reissue of forfeited shares is finally transferred toOn forfeiture, the amount already paid on the shares is credited toIf the articles are silent, interest on calls in arrears can be charged at most atApart from sweat equity, a company can ordinarily issue shares at a discount only onRs. 5,40,000 is raised by issuing Rs. 100 shares at 20% premium. How many shares?When shares are issued at a premium, the premium is credited to