Question

Chandra Paints Ltd. invited applications for issuing 4,00,000 shares of ₹100 each at par. The amount was payable as follows:

On Application	₹40
On Allotment	₹30
On First and Final Call	₹30

Applications were received for 5,00,000 shares. Applications for 20,000 shares were rejected, full allotment was made on applications for 80,000 shares and pro-rata allotment was made to the remaining applicants. All calls were made and were duly received except first and final call from Somesh who applied for 5,000 shares and was allotted shares under pro-rata category. His shares were forfeited.
Amount Credited to Share Forfeiture Account will be:

Options

• ₹3,20,000

• ₹3,50,000

• ₹3,10,000

• ₹2,80,000

Answer 1

₹2,80,000

Explanation:

Scheme of Allotment:

	Shares Applied	Allotted
Rejected	20,000	-
Full Allotment	80,000	80,000
Pro-rata Allotment (5,00,000 − 20,000 − 80,000)	4,00,000	3,20,000
	5,00,000	4,00,000

Shares Allotted to Somesh `= 5000xx320000/400000`

= 4,000

Entry for Forfeiture of Shares:

Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Share Capital A/c (4,000 × ₹100)		4,00,000
	To Share First and Final Call A/c (4,000 × ₹30)			1,20,000
	To Share Forfeiture A/c			2,80,000