CA Foundation · Accounting · Company Accounts
Sharma Ltd. forfeited 200 equity shares of ₹10 each (fully called up) for non-payment of the final call of ₹3 per share. The shares had been issued at par. What amount will be credited to Share Forfeiture Account on forfeiture?
The Share Forfeiture Account is credited with ₹1,400. Shares issued at par are forfeited, and the amount credited equals the amount actually received, which is ₹7 per share on 200 shares. The unpaid ₹3 per share is not credited to forfeiture.
- A₹600
- B₹1,400Correct
- C₹2,000
- D₹1,000
Explanation
The final call of ₹3 was unpaid, so each share had received ₹7. Amount credited to Share Forfeiture Account = 200 × ₹7 = ₹1,400. The figure ₹600 is the calls-in-arrears amount, which is debited to Calls-in-Arrears, not credited to forfeiture. ₹2,000 is the full called-up capital debited to Share Capital.
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