Determine the maximum permissible discount which a company can allow at the time of reissue of forfeited shares in the following cases: (i) A share of Rs. 100 originally issued at par on which application and allotment money of Rs. 60 has been received. (ii) A share of Rs. 100 originally issued at a premium of Rs. 20 on which application and allotment money (including premium) of Rs. 60 has been received. (iii) A share of Rs. 100 originally issued at a premium of Rs. 20 on which application and allotment money (excluding premium) of Rs. 60 has been received.

SOLUTION

Maximum permissible discount in Case (i) Rs. 60; Case (ii) Rs. 40 and Case (iii)Rs. 60.