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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:
Options
₹3,000
₹3,500
₹4,000
₹4,500
MCQ
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Solution
₹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
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Chapter 6: Company Accounts - Issue of Shares - OBJECTIVE TYPE QUESTIONS [Page 6.206]
