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Question
Savi Ltd. forfeited 50 shares of ₹ 100 each issued at a premium of 10%, on which allotment money of ₹ 30 per share (including premium) and first and final call of ₹ 40 per share were not received.
What is the minimum amount per share at which the company can reissue these shares?
Solution
The maximum discount that the company can give at the reissue of forfeited shares = The amount received on the first issue of those shares
Amount received on first issue of those shares = 50 × (100 − (20 + 40)) = 50 × 40 = ₹ 2,000
The maximum discount that can be allowed on reissue = ₹ 2,000
Maximum discount per share will be = `(2,000)/50` = ₹ 40 per share
The minimum amount per share at which the company can reissue these share
= Face value − Maximum discount
= 100 − 40
= ₹ 60 per share
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