Reena Ltd. issued a prospectus inviting applications for 3000 shares of ₹100 each at a premium of ₹20 payable as follows:
On Application ₹20 per share
On Allotment ₹50 per share (including premium)
On First Call ₹20 per share
On Second Call ₹ 30 per share
Radha to whom 360 shares were allotted, failed to pay Allotment Money and Call Money and her shares were forfeited.
Amount of Securities Premium Reserve in Balance Sheet will be:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → ₹52,800
The premium of Rs. 20 a share is called with allotment. Radha paid nothing on allotment, so the premium on her shares was never received; on forfeiture Securities Premium Reserve is debited with it.
Premium due on 3,000 shares = 3,000 × 20 = Rs. 60,000
Less: premium not received on Radha’s 360 shares = 360 × 20 = Rs. 7,200
Securities Premium Reserve in the Balance Sheet = Rs. 52,800
NCERT (2026-27 edition):
NCERT (2026-27 edition):
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