Question

EF Ltd. invited applications for issuing 80,000 equity shares of ₹50 each at a premium of 20%. The amount was payable as follows: On Application ₹20 per share (including premium ₹5) On Allotment ₹15 per share (including premium ₹5) On First Call ₹15 per share On Second and Final Call Balance amount Applications for 1,20,000 shares were received. Applications for 20,000 shares were rejected and pro-rata allotment was made to the remaining applicants. Seema, holding 4,000 shares failed to pay the allotment money. Afterwards, the first call was made. Seema paid allotment money along with the first call. Sahaj who had applied for 2,500 shares failed to pay the first call money. Sahaj's shares were forfeited and subsequently 40% shares were reissued to Geeta for ₹38 per share, ₹40 per share paid up. Final call was not made.

Based on above information, you are required to answer the following question:

In the entry of forfeiture of Sahaj's shares, amount Credited to Share Forfeiture A/c will be ______.

Options

• ₹37,500

• ₹50,000

• ₹30,000

• ₹60,000

Answer 1

In the entry of forfeiture of Sahaj's shares, amount Credited to Share Forfeiture A/c will be ₹50,000.

Explanation:

Shares allotted to Sahaj: `2,500 xx (80,000)/(1,00,000) = 2,000`

Entry on forfeiture of Sahaj's shares:

Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Equity Share Capital A/c (2,000 × ₹40)     ...Dr.		80,000
	To Calls in Arrears A/c			30,000
	To Share Forfeiture A/c			50,000
	(Forfeiture of 2,000 shares of Sahaj)