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Question : SK Ltd. invited applications for 3,20,000 equity shares of  Rs. 10 each at a premium of  Rs. 5 per share. The amount was payable as follows:

On application— Rs. 3 per share (including premium  Rs. 1 per share),

On allotment— Rs. 5 per share (including premium  Rs. 2 per share),

On first and final call—Balance.

Applications for 4,00,000 shares were received. Applications for 40,000 shares were rejected and application money refunded. Shares were allotted on pro rata basis to the remaining applicants. Excess money received with applications was adjusted towards sums due on allotment. Jeevan holding 800 shares failed to pay the allotment money and his shares were immediately forfeited. Afterwards, final call was made. Ganesh who had applied for 2,700 shares failed to pay the final call. His shares were also forfeited. Out of the forfeited shares, 1,500 shares were reissued at  Rs. 8 per share fully paid-up. The reissued shares included all the forfeited shares of Jeevan

Question:- At the time of forfeiture of 800 shares, share capital account will be debited with _______.

Option 1: Rs. 4,000

Option 2: Rs. 8,000

Option 3: Rs. 4,800

Option 4: None of these


Team Careers360 14th Jan, 2024
Answer (1)
Team Careers360 15th Jan, 2024

Correct Answer: Rs. 4,000


Solution : Answer = Rs. 4,000

Application money excluding premium = 3 - 1 (premium) = Rs.2
Allotment money excluding premium = 5 - 2 (premium) = Rs.3
Called up amount per share                                           = Rs.5
Number of shares = 800.
Amount debited to Share Capital A/c = Rs.800 X 5 = Rs.4,000.
Hence, the correct option is 1.

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