A share of ₹10. Issued at a premium of ₹3. On which ₹3 was payable on application and ₹5 was payable on allotment including premium. A shareholder who had applied for 100 shares was Allotted Only 50 Shares and due to non payment of allotment his shares were forfeited. In this case the amount to be debited to securities premium A/c on forfeiture of these shares are:

₹100

The correct answer is option 3- ₹100.

Share applications = 100
Share allotted = 50
Excess money will be adjusted towards allotment.

Journal entry on receiving application money-
Bank A/c Dr. 300 (100x3)
    To Share Application A/c 300 (100x3)

Journal entry on transferring application money-
Share Application A/c 300 (100x3)
  To Share Capital A/c       150 (50x3)
  To Share Allotment A/c     150

Journal entry on allotment money due-
Share Allotment A/c Dr. 250 (50x5)
  To Share Capital A/c            100 (50x2)
  To Securities premium A/c    150 (50x3)

The excess application money (₹150) is first adjusted towards the Share Capital due on allotment.

Capital Due on allotment: ₹100. (Fully covered by excess).

Remaining Excess: ₹150−₹100 = ₹50 is then adjusted towards the Securities Premium.

• Premium Due: ₹150.

• Premium Received (via adjustment): ₹50.

• Premium Unpaid: $₹150-₹50=₹100$.

When shares are forfeited, the Securities Premium Account is debited only with the amount of premium that has NOT been received. Since ₹50 was received (adjusted) and ₹100 remains unpaid, the account is debited by ₹100.

Journal entry for the forfeiture of 50 shares is as follows-
Share Capital A/c                       Dr. 250 
Securities premium reserve A/c   Dr. 100 
    To Share forfeiture A/c                    250
    To Share allotment A/c                    100 

Thus, the amount to be debited to securities premium A/c on forfeiture of these shares is 100.