Accountancy Part AAccounting for Shares

A company forfeited 5,000 shares of Rs. 10 each for non-payment of fi…

A company forfeited 5,000 shares of Rs. 10 each for non-payment of final call of Rs. 4 per share. Share Forfeiture A/c will be credited with the amount:

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → Rs. 30,000

On forfeiture, Share Forfeiture Account is credited with the amount already received on the shares. Here everything except the final call had been paid.

Amount received per share = Rs. 10 − Rs. 4 (final call unpaid) = Rs. 6
Share Forfeiture A/c = 5,000 shares × Rs. 6 = Rs. 30,000

NCERT (2026-27 edition):
Forfeiture of Shares – “… It may be noted here that when the shares are forfeited, all entries relating to the forfeited shares must be reversed except the entry relating to share premium received, if any. Accordingly, the share capital is debited to the extent to called-up capital and credited to (i) respective unpaid calls account i.e., calls in arrears and (ii) share forfeiture account with the amount already received on shares.”