Moonrise Co. authorised with Share Capital of Rs.5,00,000 issued 10,000 equity shares of Rs.12 each.
Money was payable as
Rs.4 on Application
Rs.4 on Allotment (including premium)
Rs.4 on 1st and final call.
Applications were received for 12,000 shares and the directors decided to make pro-rata allotment. Mr. Rashidi an applicant for 120 shares, could not pay allotment and call money and Mr. Shantanu a holder of 200 shares failed to pay the call. All these shares were forfeited. Out of these forfeited shares, 150 shares (whole of Rashidi) were issued at Rs.8 per share answer following questions on the basis of above, answer from question.
Amount of Securities Premium Reserve to be debited at the time of forfeiture of shares will be
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Rs.200
On forfeiture, Securities Premium Reserve is debited only for shares on which the premium has not been received. The premium (Rs. 2 a share) is due with the allotment money.
Pro-rata allotment: 12,000 shares applied, 10,000 allotted, so each applicant gets 10/12 of the shares applied for
Rashidi's shares allotted = 120 × 10/12 = 100 shares; he did not pay the allotment money, so the premium on them was not received
Shantanu paid the allotment money (including premium) and failed only on the call, so no premium is debited on his 200 shares
Securities Premium Reserve debited = 100 shares × Rs. 2 = Rs. 200
NCERT (2026-27 edition):
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