Question

Sun Star Ltd. forfeited 40 shares of ₹ 10 each issued at a premium of 40% to Raj who had applied for 48 shares. After having paid ₹ 6 (including ₹ 2 premium), he did not pay allotment money of ₹ 2 (including ₹ 1 premium) and on his subsequent failure to pay the first call of ₹ 3 (including ₹ 1 premium) his shares were forfeited. The amount to be credited to Forfeited Shares Account is ______.

Options

• ₹ 288

• ₹ 200

• ₹ 192

• ₹ 160

Answer 1

Sun Star Ltd. forfeited 40 shares of ₹ 10 each issued at a premium of 40% to Raj who had applied for 48 shares. After having paid ₹ 6 (including ₹ 2 premium), he did not pay allotment money of ₹ 2 (including ₹ 1 premium) and on his subsequent failure to pay the first call of ₹ 3 (including ₹ 1 premium) his shares were forfeited. The amount to be credited to Forfeited Shares Account is 200.

Explanation:

Application money received from Raj on shares applied (48 × ₹ 6) = 288

Less: Application money due on shares allotted (40 × ₹ 6) = 240

Excess application money adjusted on allotment (a – b) = 48

Out of this, ₹ 40 is adjusted as part of capital at the time of allotment, ₹ 8 is adjusted as part of securities premium.

Amount to be credited to forfeited Shares = ₹ 160(40 × ₹ 4) + ₹ 40 = ₹ 200

With the amount received excluding Securities Premium, if any, already received.