Read the passage and answer the question.
Superb Limited issued Equity shares of the value ₹3,00,000, the face value being ₹10 each at a premium of 20%. The amount payable was-
Application-30%
Allotment-50% (including premium)
Two calls - Equal amount
Pro-Rata allotment was done to all applicants of 40,000 shares.
Ramit who applied for 80 shares failed to pay both calls and his shares were subsequently forfeited.
The amount of ₹120 regarding 1st call is recorded as:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Calls in Arrears
Ramit was allotted 60 shares (see the working below). The first call is Rs. 2 a share, so Rs. 120 was due from him on the first call and was not paid. An amount called up but not paid by a shareholder is Calls in Arrears.
Option (1) Calls in Advance — Incorrect. Calls in advance is money paid before it is called; Ramit paid nothing on the calls.
Option (3) Forfeited Shares — Incorrect. Share Forfeiture Account is credited with the amount received on the forfeited shares, not with the unpaid call.
Option (4) Capital Reserve — Incorrect. Capital reserve arises only from the profit on reissue of forfeited shares.
Working: 40,000 shares were applied for and 30,000 allotted (Rs. 3,00,000 ÷ Rs. 10), so each applicant got 3/4 of the shares applied for; Ramit got 80 × 3/4 = 60 shares.
NCERT (2026-27 edition): |