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CSEET · Fundamentals of Accounting · Introduction to Company Accounts

Sharma Ltd forfeited 100 equity shares of Rs 10 each, Rs 8 called up, on which the holder had paid Rs 5 per share. What is the credit to Share Forfeiture Account?

The credit to Share Forfeiture Account is Rs 500, being 100 shares multiplied by the Rs 5 actually paid per share. The called-up amount of Rs 800 is debited to Share Capital, and the Rs 300 difference is the unpaid call money.

  1. ARs 300
  2. BRs 500Correct
  3. CRs 800
  4. DRs 1,000

Explanation

Amount received = 100 x Rs 5 = Rs 500, which is credited to Share Forfeiture Account. Rs 800 is the called-up amount, which is the debit to Share Capital. Rs 300 is the unpaid calls (800-500) credited to calls in arrear.

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