Read the following information about the company and answer the following question.
Subscribed and fully paid-up capital is 35,500 equity shares of ₹100 each.
Subscribed but not fully paid-up capital is 500 equity shares of ₹100 each fully called up on which ₹20 is unpaid.
Out of 500 shares, 200 shares are forfeited.
What is the treatment of calls in arrears and share forfeiture balance?
Answer & explanation
Correct answer: option 3
The correct answer is option 3- Deduct calls in arrears and Add share forfeiture balance.
Subscribed but not fully paid-up capital
300 equity shares of Rs. 100 each fully called up 30,000
Less: Calls-in-arrears
(300×20) 6,000
Add: Share forfeiture A/c
(200 shares × Rs. 80) 16,000
Balance = 30,000 - 6,000 + 16,000
= 40,000