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Standard XII

Accountancy

Forfeiture of Shares

Forfeiture of...

Question

Forfeiture of shares results in compulsory termination of _____________ due to non-payment of allotment/call money.

allotment

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membership

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subscription

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issue

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Solution

The correct option is B membership
In absence of payment of allotment money by the shareholders, shares can be forfeited by the company. In case of forfeiture of shares, the membership is compulsorily terminated.

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Similar questions

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. 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. _______may be said to be the compulsory termination of membership by way of penalty for non-payment of allotment and/or any call money.

Give Journal entries for forfeiture and re-issue of shares:

(i) A Ltd. forfeited 1,000 shares of Rs 10 each, Rs 7 called up, issued at a premium of 20% (to be paid at the time of allotment) for non-payment of a first call of Rs 2 per share. Out of these, 600 shares were re-issued as Rs 7 paid up for Rs 4 per share.

(ii) B Ltd. forfeited 1,000 shares of Rs 10 each, Rs 7 called up, issued at a premium of 20% (to be paid at the time of allotment) for non-payment of allotment money of Rs 4 per share (including premium) and first call of Rs 2 per share. Out of these, 600 shares were re-issued as fully paid in such a way that Rs 900 were transferred to capital reserve.

Q. R Ltd. forfeited 300 equity shares of Rs. 10 fully called-up, held by Mr. X for non-payment of first call of Rs. 2 and final of Rs. 3 each. However, he paid application money @ Rs. 2 per share and allotment money @ Rs. 3 per share. At the time of forfeiture for share, Capital A/c will be debited by Rs. _____.

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Forfeiture of shares results in compulsory termination of _____________ due to non-payment of allotment/call money.

The correct option is B membershipIn absence of payment of allotment money by the shareholders, shares can be forfeited by the company. In case of forfeiture of shares, the membership is compulsorily terminated.

The correct option is B membership
In absence of payment of allotment money by the shareholders, shares can be forfeited by the company. In case of forfeiture of shares, the membership is compulsorily terminated.