Forfeit example sentences

Once all the forfeited shares have been reissued, any credit balance on forfeited shares' account is transferred to Capital Reserve representing profit on forfeiture of shares.When shares are forefeited all entries relating to the shares forfeited, except those relating to premium, already recorded in the accounting records, must be reversed.Forfeiture means the cancellation of allotment due to breach of contract and to treat the amount already received on such shares as forfeited to the company.Where shares forfeited were originally issued at a discount, the discount applicable to such shares must be cancelled or written back.In case, however, if the premium amount has not been received, either wholly or partially, in respect of the shares forfeited, the Share Premium Account will also be debited with the amount of premium not received along-with the Share Capital Account at the time forfeiture.Generally speaking, accounting treatment on forfeiture is to reverse the entries passed till the stage of forfeiture, the amount already received on the shares being credited to Forfeited Shares Account.In such circumstances, the company can forfeit their shares, i.e. cancel their allotment and treat the amount already received thereon as forfeited to the company within the framework of the provisions in its articles.One peasant who lost his rights to common land after the enclosures wrote to the local lord: 'Should a poor man take one of your sheep from the common, his life would be forfeited by law.Accordingly, share capital account is debited with the amount calledup in respect of shares are forfeited and crediting the espective unpaid calls account's or calls in arrears account, as the case may be will the unpaid amount, and share foreited account with the amount already received.The balance, if any, left in the Share- Forfeited Account, should be treated as capital profit and transferred to Capital Reserve Account.In the event of all forfeited share not being reissued, the credit amount on forfeited shares' account relating to shares yet to be reissued is carried forward and the remaining balance on the account only is credited to capital reserve account.The shares can be reissued even at a discount provided the amount of discount allowed does not exceed the credit balance of forfeited shares' account relating to shares being reissued.The precise accounting treatment of share forfeiture depends upon the conditions on which the shares have been issued — at par, premium or discount.In such a case, the company has the authority to forfeit shares of the defaulters.The important point to be noted in this context is that the share premium account is not to be debited at the time of forfeiture if the premium has been received in respect of the forefeited share.