Question

If 500 shares of ₹10 issued at a premium of ₹1 on which ₹9 (including premium) have been called and ₹7 including premium have been paid are forfeited, the forfeiture account should be credited by:

विकल्प

• ₹3,000

• ₹3,500

• ₹4,000

• ₹4,500

Answer 1

₹3,000

Explanation:

Number of shares = 500, Face value = ₹10, Premium = ₹1, Total issue price = ₹11

Called-up = ₹9

called-up on Share Capital = ₹9 − ₹1 (premium) = ₹8

Paid = ₹7

Share Capital = ₹7 − ₹1 (premium) = ₹6

Unpaid towards Capital = ₹8 − ₹6 = ₹2

Forfeiture Treatment:

Share Capital A/c is debited with called-up capital = ₹8 × 500 = ₹4,000

Calls in Arrear A/c = unpaid capital = ₹2 × 500 = ₹1,000

Share Forfeiture A/c = amount received on capital = ₹6 × 500 = ₹3,000