CS Executive · Corporate Accounting and Financial Management · Accounting for Share Capital
Asha Textiles Ltd forfeited 100 equity shares of Rs 10 each, Rs 8 called up, on which the holder had paid only Rs 5 per share (application and allotment). What is the amount credited to Share Forfeiture Account?
Rs 500 is credited to Share Forfeiture Account, being 100 shares multiplied by the Rs 5 per share actually received. The called-up Rs 800 is debited to Share Capital and the unpaid Rs 300 is credited to Calls-in-Arrears.
- ARs 800
- BRs 300
- CRs 500Correct
- DRs 1,000
Explanation
Amount received is 100 x Rs 5 = Rs 500, credited to Share Forfeiture Account. Rs 800 is the called-up capital debited to Share Capital, and the Rs 300 unpaid call is credited to Calls-in-Arrears. Rs 1,000 is the nominal value, which is the wrong base.
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