Sahil, a share holder, failed to pay the money for second and final call of Rs. 20 on 1,000 shares issued to him at Rs. 120 (face value of Rs. 100 per share). His shares were forfeited after the second and final call. Which is correct about share forfeiture-
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Share Forfeiture A/c will be credited with 80,000
On forfeiture, Share Capital is debited with the amount called up, the unpaid call is credited, and the amount already received on capital is credited to Share Forfeiture Account. The premium of Rs. 20 per share was received earlier, so it is not touched.
Share Capital debited = 1,000 × Rs. 100 = Rs. 1,00,000
Second and final call credited (unpaid) = 1,000 × Rs. 20 = Rs. 20,000
Share Forfeiture credited = Rs. 1,00,000 − Rs. 20,000 = Rs. 80,000
Share Forfeiture Account is never debited at the time of forfeiture; it is debited only later, when the shares are reissued at a discount or the balance is moved to capital reserve.
NCERT (2026-27 edition):
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