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Nidiya Limited was incorporated on 1st April 2017 with a registered office in Mumbai. What amount of share forfeiture would be reflected in the balance sheet? -

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Question

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

Nidiya Limited was incorporated on 1st April 2017 with a registered office in Mumbai. The capital clause of the memorandum of Association reflected a registered capital of 8,00,000 equity shares of ₹ 10 each and 1,00,000 preference shares of ₹ 50 each.

Since some large investments were required for building and machinery the company in consultation with vendors, M/s VPS Enterprises, issued 1,00,000 equity shares and 20,000 preference shares at par with them in full consideration of assets acquired. Besides this, the company issued 2,00,000 equity shares for cash at par payable as ₹ 3 on application, 2 on the allotment, 3 on the first call and 2 on the second call.

Till date, the second call has not yet been made and all the shareholders have paid except Mr. Ajay who did not pay allotment and calls on his 300 shares and Mr. Vipul who did not pay the first call on his 200 shares. Shares of Mr. Ajay were then forfeited and out of the 100 shares were reissued at ₹ 12 per share.

What amount of share forfeiture would be reflected in the balance sheet?

Options

  • ₹ 600

  • ₹ 900

  • ₹ 200

  • ₹ 300

MCQ

Solution

₹ 600

Explanation:

No. of shares forfeited at the end of the year: 200

Amount of share forfeiture to be reflected in the balance sheet: 200 × ₹ 3 = ₹ 600

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