06 December 2009
Respected sirs and ma'ms, I am a student of accounts from Ahmedabad,Gujarat.I just learned about reissue of forfeited shares.In this topic I was taught that when we reissue forfeited shares at a discount,we have to debit forfieted shares account with bank account.So I want to know the logic behind debiting of forfeited shares account inspite of share discount account!!!!!Please help me to know this logic.Thank you for giving me time.
07 December 2009
Share forfeit a/c means whatever amount you have received so far; has been credited to share forfeited a/c.
When you reissue these shares then it means you are using Share Forfeit a/c. So whatever expenditure i.e. discount is there; that is your loss while reissuing forfeited shares.
When all the underlying income has been credited to the Share forfeited a/c then expenses should also be debited to this account.
08 December 2009
because we are not providing discount on share so we are not debiting discount on share a/c.further we have to adjust credit balance say 1000 of forfeit account so when we received 800 agnst all share than balance will stand in credit so we reverse rest of 200 as discount and credit rest of 800 to share capital account.
CAclubindia
