Accounting for Share Capital · Class 12 · CBSE · Commerce Accountancy
ABC Ltd. forfeited 1,000 shares of Rs. 10 each issued at 10% premium, on which the first call of Rs. 3 per share was not paid. The final call of Rs.…
Practice question from Accounting for Share Capital (Class 12 · CBSE · Commerce Accountancy), with the correct answer and a step-by-step solution.
hard · MCQ · Q-AE6577
ABC Ltd. forfeited 1,000 shares of Rs. 10 each issued at 10% premium, on which the first call of Rs. 3 per share was not paid. The final call of Rs. 2 per share has not yet been made. What amount should be credited to Share Forfeiture Account at the time of forfeiture?
- A.Rs. 5,000Correct answer
- B.Rs. 8,000
- C.Rs. 6,000
- D.Rs. 7,000
Solution
The called-up value per share is Rs. 10 - Rs. 2 (final call not made) = Rs. 8. Since the premium of Rs. 1 was duly received (on application/allotment), it is not to be cancelled. The amount called and paid is Rs. 8 - Rs. 3 (unpaid first call) = Rs. 5 per share. For 1,000 shares, the amount credited to Share Forfeiture is 1,000 * Rs. 5 = Rs. 5,000.
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