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Nilanjan Bhowmick AIR 3, CSIR NET (Earth Science)
N. K. Gupta posted an Question
April 04, 2021 • 21:39 pm
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30 points
30 points
- UGC NET
- Commerce
Forfeiture of shares issued at a premium
forfeiture of shares issued at a premium in short and simple way what this topic want to tell us
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Rucha rajesh shingvekar
https://www.flexiprep.com/NIOS-Notes/Senior-Secondary/Accountancy/NIOS-Accountancy-Ch-24-Forfeiture-Of-Shares-Part-2.html
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Priya gulani
When premium has not been received on forfeited shares: In case the shares were issued at premium and the premium money has become due but has not been paid by defaulting shareholder, then any credit already given to ‘Securities Premium Reserve Account’ must be debited (cancelled) at the time of forfeiture of shares.
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Priya gulani
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When premium money has been received on forfeited shares: In case securities premium has been duly received on the shares to be forfeited, the Securities Premium Reserve Account already credited at the time of making call will not be cancelled at the time of forfeiture of shares. In other words, premium received on forfeited shares cannot be transferred to ‘Share Forfeited Account’ because Section 78 (2) of the Companies Act imposes restrictions on the application of Securities Premium Reserve Account. It must be remembered here that ‘Securities Premium Reserve Account’ may not be proportionate to the shares issued in such a case. Entry: Since Securities Premium Reserve A/c is not debited (cancelled) in this case, the accounting treatment is same as the one passed in case of shares issued at par. i.e.: Share capital A/c dr To Share Forfeited A/c To Calls-in-arrears
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Rucha rajesh shingvekar
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