Question

Mars Ltd. forfeited 50 shares of ₹ 100 each issued at 10% premium on which allotment money of ₹ 30 per share (including premium) and first call of ₹ 30 per share were not received and the second and final call of ₹ 20 per share was not yet called. 20 of these shares were reissued as ₹ 80 paid-up for ₹ 70 per share. On reissue, the Forfeited Shares Account will be

Options

• Debited with ₹ 500.

• Credited with ₹ 400.

• Debited with ₹ 200.

• Credited with ₹ 500.

Answer 1

Debited with ₹ 200.

Explanation:

20 shares were reissued as ₹ 80 paid-up for ₹ 70 per share. Thus, discount on reissue is ₹ 10 per share.

20 × ₹ 10 = ₹ 200

Therefore, Forfeited Shares A/c is debited by ₹ 200.