Question : S Ltd. issued 40,000 Shares of Rs. 10 each, for Rs. 12 each payable as under:
On application Rs. 2 per share, on allotment Rs. 5 per share (including premium), on first call Rs. 2 per share and on second and final call Rs. 3 per share.
Applications were received for 60,000 shares. Allotment was made on pro rata basis to the applicants for 48,000 shares, remaining applications being refused. Money overpaid on application was applied towards amount due on allotment.
A, to whom 1,600 shares were allotted, failed to pay the allotment money and B, to whom 2,000 shares were allotted, failed to pay two calls. These were subsequently forfeited after the second and final call.
Question:- At the time of forfeiture of shares, share forfeited account will be credited _______.
Option 1: Rs. 13,840
Option 2: Rs. 10,000
Option 3: Rs. 11,600
Option 4: None of these
Correct Answer: Rs. 13,840
Solution : Answer = Rs. 13,840
Equity Share Capital A/c Dr. 16,000
Securities Premium A/c Dr. 3,200
To Share Forfeiture A/c 3,840
To Equity Share Allotment A/c 7,360
To Equity Share first Call A/c 3,200
To Equity Share Second and Final Call A/c 4,800
(1,600 shares held by Ram forfeited for the non-payment amount due including premium)
Equity Share Capital A/c Dr. 20,000
To Equity Share Forfeiture A/c 10,000
To Equity Share First Call A/c 4,000
To Equity Share Second and Final Call A/c 6,000
(2,000 shares held by Shyam forfeited for non-payment of amount due)
Therefore, the total amount credited to the Share Forfeiture A/c = Rs.3,840 + Rs.10,000 = Rs.13,840.
Hence, the correct option is 1.
