Question

India Ltd. invited applications for issuing 3,00,000 equity shares of ₹10 each at a premium of ₹30 per share. The amount was payable as follows: On Applications ₹7 per share (including ₹5 premium) On Allotment ₹10 per share (including ₹7 premium) On First Call ₹11 per share (including ₹8 premium) On Second and Final Call Balance Amount A shareholder holding 2,000 shares did not pay the first call and second and final call money and his shares were forfeited after the final call.

Securities Premium Reserve Account will be debited by ______.

Options

• ₹36,000

• ₹60,000

• ₹24,000

• ₹20,000

Answer 1

Securities Premium Reserve Account will be debited by ₹36,000.

Explanation:

A shareholder didn’t pay the first call (₹8 premium) and second call (₹10 premium) on 2,000 shares. So, unpaid premium = ₹18 per share.

debited to Securities Premium Reserve A/c

2,000 × ₹18 

= ₹36,000