A company issued $5, 000$ shares of Rs. $10$ each at $20 %$ premium payable as follows: Application- Rs. $2$ , allotment Rs. $5$ (including premium) and first and Final Call Rs. $5$ . A holder of $200$ shares failed to pay the first and final call. His shares were forfeiture. Calculate the amount to be credited to share Forfeiture Account.

Rs.

1, 000

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Rs.

1, 400

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Rs.

400

No worries! We‘ve got your back. Try BYJU‘S free classes today!

None of these

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is A Rs. $1, 000$
When a shareholder doesn't pay up the called up value, his shares are forfeited and the amount is credited to forfeiture account at the time of forfeiture.
$F o r f e i t u r e A m o u n t = A p p l i c a t i o n a m o u n t + A l l o t m e n t a m o u n t$
Substitute values in the above equation
$F o r f e i t u r e A m o u n t = R s 2 + R s 3 = R s 5$

$F o r f e i t u r e A m o u n t t o b e c r e d i t e d = S h a r e s f o r f e i t e d \times F o r f e i t u r e a m o u n t$
Substitute values in the above equation
$F o r f e i t u r e A m o u n t t o b e c r e d i t e d = 200 s h a r e s \times R s 5 = R s 1, 000$ .

Suggest Corrections

Similar questions

Q. D Ltd. issued 1,00,000 equity shares of Rs 10 each at a premium of Rs. 2 per share. The amount payable was Rs. 2 on application, Rs. 5 on allotment (including premium) & rest on first & final call. Applications were received for 1,20,000 shares. Excess application money was refunded to applications. All monies due were received except the allotment and first & final call monies on 1,000 shares. These shares were forfeited and reissued at Rs 9 per share.
On forfeiture of shares, Share Forfeiture Account will be credited by_____.

PRACTICAL PROBLEMS

(Forfeiture of shares issued at premium)

The Century Ltd. issued 8,000 shares of Rs 100 at a premium of 10% payable as under-

On Application	-	Rs 25	On Allotment	-	Rs 40 (including premium)
On First Call	-	Rs 20	On Second Call	-	Rs 25

Company called up allotment and both the calls which were duly received except Ramesh to whom 500 shares were allotted failed to pay allotment and calls.

Prepare Journal of Century Ltd.

Q. D Ltd. issued 1,00,000 equity shares of Rs 10 each at a premium of Rs. 2 per share. The amount payable was Rs. 2 on application, Rs. 5 on allotment (including premium) & rest on first & final call. Applications were received for 1,20,000 shares. Excess application money was refunded to applications. All monies due were received except the allotment and first & final call monies on 1,000 shares. These shares were forfeited and reissued at Rs 9 per share.
On reissue of forfeited shares, balance of share forfeiture account transferred to capital reserve account will be _____.

XYZ Ltd. forfeited 500 equity shares of Rs. 100 each issued at a premium of 10%, fully called-up. The amount payable on shares is: on application Rs. 20, On allotment Rs.40 (including premium), On first and Final call Rs. 50. The company has called till the allotment stage. And these shareholders have only paid till application. The journal entry on forfeiture will be:

Q. National Heavy Chemicals Ltd. issued 5,000 shares of Rs 10 each at a premium of Rs 2 per share for public subscription, payable as Rs 5 on Application and Rs 7 on allotment (including premium). Rajesh who was allotted 200 shares by the Company failed to pay the allotment amount and his shares were forfeited by the Company. 100 out of these forfeited shares were allotted to Brijesh as fully paid up for Rs 8 per share. The Profit on re-issue is ____________.

Join BYJU'S Learning Program