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Question

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_____.

A
Rs. 3,000
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B
Rs. 5,000
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C
Rs. 8,000
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D
Rs. 2,000
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Solution

The correct option is D Rs. 2,000
Here, Rs 2 per share is payable on application, Rs 5 is payable on allotment which also includes the premium of Rs 2 per share and the rest is payable on first and final call. This means if the total on shares including the premium is Rs 12 per share, the amount payable on first and final call is Rs 5 and hence, the amount due on 1,00,000 shares is Rs 5,00,000. But the allotment and first & final call monies on 1,000 shares was not received and are called Call-in-arrears. In order to calculate the amount to be debited to share forfeiture account the folk Number of shares forfeited and Amount per share called up should be multiplied i.e. Rs 5*1,000 i.e Rs 5,000.

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Q.

R.K.Ltd., invited applications for issuing 80,000 equity shares of Rs 10 each at a premium of Rs 35 per share. The amount was payable as follows:
On Application Rs 8 (including Rs 5 premium) per share.
On Allotment Rs 12 (including Rs 10 premium) per share.

On First and Final Call Balance.

Application for 75,000 shares were received and allotment was made to all the applicants. Rahim, a shareholder who was allotted 3,000 shares failed to pay allotment money and his shares were immediately forfeited. Afterwards, the first and final call was made. Suhani who held 3,000 shares failed to pay the final call. Her shares were also forfeited. All the forfeited shares were re-issued for a sum of Rs 62,000 as fully paid up.

Pass the necessary Journal entries for the above transactions in the books of R.K.Ltd.

OR

Sargam Ltd., invited applications for issuing 80,000 equity shares of Rs 100 each at a premium. The amount was payable as follows :

On Application Rs 20 per share.

On Allotment Rs 60 (including premium) per share.

On First and Final Call Rs 40 per share.

Application for 1,20,000 shares were received. Allotment was made on pro-rata basis to all the applicants. Excess money received on applications was adjusted on sums due to allotment. Sitaram, who had applied for 6,000 shares failed to pay the allotment money and Harnam did not pay first and final call on 800 shares allotted to him. The shares of Sitaram and Harnam were forfeited. 4,200 of these shares were re-issued for Rs 100 per share as fully paid up. The re-issued shares included all the forfeited shares of Harnam.

Pass necessary Journal entries for the above transactions in the books of Sargam Ltd.

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