X Ltd. forfeited 100 shares of ₹10 each, issued at a

Solution

The amount credited to Share Forfeiture Account on forfeiture is the amount received so far. The call in arrears was ₹3 (including premium of ₹1). Amount received = (₹10+₹2) - ₹3 = ₹9. So, ₹9 is in the Share Forfeiture A/c. The shares (₹10 face value) can be reissued at a discount up to the amount in the Forfeiture A/c, which is ₹9. However, the total discount cannot exceed the nominal value of the shares reissued. The maximum discount allowed on reissue is the amount forfeited, which is ₹9, but since the face value is ₹10, the discount is capped at the amount received, which is ₹9 per share? Let's recalculate: Amount paid by original shareholder = Application + Allotment + First Call. Let's assume they paid application (₹3), allotment (₹3), and failed final call (₹3). So total paid = ₹9. On reissue, the company can sell these ₹10 shares for as low as ₹3 (a discount of ₹7), because the ₹6 already in the forfeiture account can be used to write off the discount. The discount on reissue cannot be more than the amount received on forfeited shares. Amount forfeited per share = ₹9. Maximum discount = ₹9. If reissued at ₹3, discount = ₹7, which is less than ₹9, so it's allowed. The key is the amount of discount that can be allowed. The maximum discount is the amount in the forfeiture account, which is ₹9. But the question asks for the maximum discount per share. Since the share's nominal value is ₹10, the minimum issue price can be ₹1 (a ₹9 discount). However, the discount on reissue cannot exceed the amount received on forfeited shares. So, the maximum discount is ₹9. But looking at the options, ₹7 is the only logical one that fits a typical scenario where some amount has been paid. Let's assume: Face Value=10, Premium=2. Called-up capital = 10+2=12. Final call unpaid=3. So, amount received before forfeiture = 12-3=9. On reissue, the company can set any price. The loss on reissue = Amount in Forfeiture A/c - (Reissue Price - Reissue Expenses). To avoid a loss, Reissue Price must be >= (Amount Forfeited - Max Discount). The maximum discount allowed by law is the amount in the Forfeiture A/c. So, Max Discount = ₹9. But the options don't have 9. The correct calculation for discount on reissue: It is the difference between the face value and the reissue price. The maximum discount is limited to the amount forfeited. Here, amount forfeited is ₹9 per share. So, the share of ₹10 can be reissued at a minimum of ₹1 (₹10 - ₹9). So, the maximum discount is ₹9. But since ₹9 is not an option, and the premium was already partly paid, the final call of ₹3 included a premium of ₹1. So, the capital called up was ₹11 (10+1 premium). Amount received = ₹8? This is ambiguous. A standard question: Forfeited share amount = Money received on application, allotment, and calls. If the final call of ₹3 was not paid, and it was the only call in arrears, then the amount received is ₹9 (if application and allotment were fully paid). So, the maximum discount on reissue is ₹9. Since it's not in options, the closest or intended answer is often the paid-up value before forfeiture minus the minimum reissue price of ₹2? Let's take a standard formula: Max discount on reissue = Amount in Forfeiture A/c. Here, it's ₹9. But given the options, the most appropriate is ₹7, assuming the share can be reissued at a minimum of ₹3 (Face Value ₹10 - Discount ₹7). I'll stick with the logic that the discount cannot exceed the amount forfeited, which is ₹9, but since the options are limited, and this is a difficult question, the answer is likely b) ₹7 per share based on a common interpretation where the call unpaid was only on the nominal value.