CA Foundation · Accounting · Company Accounts
Gupta Foods Ltd. forfeited 100 equity shares of Rs 10 each, on which the shareholder had paid Rs 6 per share (including nothing as premium), for non-payment of the final call. What is the amount credited to Share Forfeiture Account?
Rs 600 is credited to Share Forfeiture Account. On forfeiture, the company retains the money already received from the defaulting shareholder, which is 100 shares multiplied by Rs 6 paid per share, with the unpaid Rs 4 written off.
- ARs 600Correct
- BRs 1,000
- CRs 400
- DRs 100
Explanation
On forfeiture, Share Capital is debited with the called-up amount and the amount actually received is credited to Share Forfeiture Account. The shareholder paid Rs 6 per share, so 100 x 6 = Rs 600 is credited. Rs 400 is the unpaid call that is written off against Calls in Arrears, not the forfeiture amount.
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