Cronic Limited issued 10,000 equity shares of Rs. 10 each payable as Rs. 2.50 on application, Rs. 3 on allotment, Rs. 2 on first call, and the balance of Rs. 2.50 on second and final call. All the shares were fully subscribed and paid except by a shareholder having 100 shares who could not pay for second and final call. Call in Arrears A/c will be debited with-
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Rs. 250
The Calls in Arrears Account is debited with the amount of money that was duly called up by the company but remains unpaid by the shareholder.
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Shares Defaulted: 100 shares
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Amount Unpaid per Share: The shareholder failed to pay only the Second and Final Call, which was Rs 2.50.
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Calls in Arrears Amount:
Calls in Arrears = Shares Defaulted×Amount Unpaid on Call= 100 shares×Rs 2.50/share
= Rs 250