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In case the shares have been issued at a premium and the amount of premium has been received then at the time of forfeiture of such share
(a) share premium account should be debited
(b) share premium account should be credited
(c) share premium account should be neither debited nor credited
(d) none of these
Wiki User
∙ 10y ago
Wiki User
∙ 9y agoWhen company is performing very well and it has reserves available and it has good reputation so in this case companies want to take benefit of this situation and issue share at more than share face value which is called issued shares at premium.
Wiki User
∙ 7y agoCapital gains
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What is the meaning of issues of shares at premium?
When shares are issued at value which is more than face value then it is called shares issued at premium.
What is the share premium?
When shares are issued at price which is more than face value then issuance of shares is called issued at premium and that excess amount above face value is called share premium.
Why are shares issued at a premium?
Well the company wants to profit. And issuing shares at premium provides capital to the company without changing its equity capital.
What Share premium?
the amount payable for a share above its nominal value. Most shares are issued at a premium to their nominal value. Share premiums are credited to the company's share premium account.
What is security premium account?
(1) Where a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premiums on those shares shall be transferred to an account, to be called "the1[securities] premium account"; and the provisions of this Act relating to the reduction of the 1[securities] capital of a company shall, except as provided in this section apply as if the 1[securities] premium account were paid-up 1[securities] capital of the company.(2) The 1[securities] premium account may, notwithstanding anything in sub-section (1), be applied by the company-(a) in paying up unissued shares of the company to be issued to members of the company as fully paid bonus shares;(b) in writing off the preliminary expenses of the company;(c) in writing off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company; or(d) in providing for the premium payable on the redemption of any redeemable preference shares or of any debentures of the company.(3) Where a company has, before the commencement of this Act, issued any shares at a premium, this section shall apply as if the shares had been issued after the commencement of this Act:Provided that any part of the premiums which has been so applied that it does not at the commencement of this Act form an identifiable part of the company's reserves within the meaning of Schedule VI shall be disregarded in determining the sum to be included in the 1[securities] premium account.
What is the meaning of issues of shares at premium?
When shares are issued at value which is more than face value then it is called shares issued at premium.
What is shares premium?
When shares are issued at price which is more than face value then issuance of shares is called issued at premium and that excess amount above face value is called share premium.
What is the share premium?
When shares are issued at price which is more than face value then issuance of shares is called issued at premium and that excess amount above face value is called share premium.
Why are shares issued at a premium?
Well the company wants to profit. And issuing shares at premium provides capital to the company without changing its equity capital.
If forfeiture share is reissued at premium then why security premium is credited?
in case the shares have been issued at a premium and the amount of premium has been received then at the time of forfeiture of such share
What do you understand by issue of shares at premium par discount?
If a share has a nominal face value of say $10.00 then if issued at less than $10.00, is said to issued at a discount If issued at $10.00, then issued at par. If issued at more than $10.00 is issued at a premium.
What Share premium?
the amount payable for a share above its nominal value. Most shares are issued at a premium to their nominal value. Share premiums are credited to the company's share premium account.
Can issued shares be split?
This is done, usually, only by the company that issued the shares.
Should bonds issued at a premium always have?
Bonds issued at a premium always have
Issuing share at premium?
In case the shares have been issued at a premium and the amount of premium has been received then at the time of forfeiture of such share (a) share premium account should be debited (b) share premium account should be credited (c) share premium account should be neither debited nor credited (d) none of these
Treasury stock plus outstanding shares would be?
Issued Shares Authorized Shares = Issued Shares (sold to investors) + Unissued Shares Issued Shares = Outstanding Stock (held by investors) + Treasury Stock (stock bought back by company)
What is a share describe the various types of shares that can be issued by a company?
A share can be defined as an asset that belongs to an individual or a group of people. The various types of shares that can be issued by a company are Authorized and issued shares. Authorized shares are the ones that a company is allowed to issue while issued shares are the shares that are allocated to shareholders.
