If a share of ₹50, on which ₹40 is called-up and ₹35 is paid, is forfeited, then with what amount the share capital account will be debited?
Answer & explanation
Correct answer: option 2
The correct answer is option 2- ₹40.
Journal entry for forfeiture-
Share Capital A/c Dr. ₹40 (Calledup amount)
To Share forfeiture A/c ₹35 (paidup amount)
To Share call A/c ₹5 (Unpaid amount)
Share capital account is debited with called up amount so the answer is ₹40.