If XYZ Co. Ltd. forfeited 10 shares of ₹10 each on which ₹7 called up, ₹5 paid on application,. What amount to be forfeited by the company?

₹50

The correct answer is option 3- ₹50.

Amount forfeited by the company is the paid up amount by the shareholders.
Paid up amount = 10 shares x Paid up application amount per share
                        = 10 x 5
                        = ₹50

Journal entry for the forfeiture of shares-

Share capital A/c Dr.      ₹70
    To share forfeiture A/c        ₹50
    To Share allotment A/c       ₹20