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Standard XII
Accountancy
Forfeiture of Shares-Issued at Par
At the time o...
Question

At the time of forfeiture, share capital Account is debited with ________.

A
Face Value
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B
Nominal Value
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C
Paid up Value
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D
Called up Value
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Solution

The correct option is D Called up Value
Forfeiture of shares is the cancellation of the shares of those shareholders who haven't paid the required value.
When share forfeiture account is debited the called up value is considered because the company cancel only that amount which is demanded by them not that value which hasn't been demanded yet.

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Q. At the time of forfeiture of shares which were originally issued at a discount, the accounting entry will be
I. A Debit Share capital account with the called-up value of shares forfeited.
II. A Credit Share forfeiture account with the amount received on forfeited shares.
III. A Credit Discount on issue of shares with the amount of discount allowed on forfeited shares,
IV. A Credit Calls-in-arrears with the amount due but not paid on forfeited shares.
Q. A company forfeited 2000 shares of Rs. 10 each(which were issued at par) held by Mr. John for non-payment of allotment money of Rs. 4 per share. The called up value per share was Rs. 9. On forfeiture, the amount debited to share capital will be ___________.
Q. A company forfeited 2,000 shares of Rs. 10 each 9 which, were issued at par) held by A for non-payment of allotment money of Rs. 4 per share. The called up value per share was Rs. 9. On forfeiture, the amount debited to share capital is?
Q.

In case of forfeiture, we debit share capital account by which amount?


Q. DateParticularsL.F.Debit (₹)Credit (₹)Share Capital A/c Dr. (i)–––Securities Premium A/c Dr. 4,000 To Share Forfeiture A/c 8,000 To Calls in Arrears A/c 14,000( _____ shares forfeited for non-payment of ₹ _(ii)___ including premium of ₹2 per share) –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––Bank A/c Dr. (iii)––––Shares Forfeiture A/c Dr. (iv)–––– To Share Capital A/c (v)––––( _______ shares reissued at ₹9 per share, fully paid at ₹10 per share) ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––Share Forfeiture A/c Dr. 1,400 To Capital Reserve A/c 1,400(Net gain on reissued shares transferred to capital reserve)
Note: Face value of shares is ₹10 each.
(i) On forfeiture, the share capital account was debited with:

[2 marks]

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Standard XII Accountancy
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