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Forfeiture of Shares-Issued at Premium

Whenever secu...

Question

Whenever securities premium is received and the shares are forfeited, what will be the treatment in Share Forfeiture A/c?

A

We will not show this amount in the Share Forfeiture A/c

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B

We will credit Share Forfeiture A/c

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C

We will debit Share Forfeiture A/c

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D

None of these

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Solution

The correct option is A
We will not show this amount in the Share Forfeiture A/c

Whenever securities premium is received and the shares are forfeited, we will not debit securities premium account and also not show this amount in the share forfeiture account.

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Similar questions

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. If the securities premium has not been received, either wholly or partially, in respect of the shares forfeited, the ________ will also be debited with the amount of premium not received along-with _________ at the time of forfeiture.

Q. In case of forfeiture, we debit share capital account by the total amount by the company so far for the forfeited shares.

Q. J Ltd. Reissued

2, 000

shares which were forfeited by crediting share forfeited by credited share forfeiture account by Rs.

3000

. These shares were reissued at Rs.

9

Per share. The amount transferred to capital reserve will be.

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_____.

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