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
The amount to be credited to the Share Forfeiture Account is the money received on the Face Value of the shares, excluding any premium already received.
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Called-up Amount per Share (Face Value): Rs 100
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Unpaid Call Amount per Share: Rs 20 (Second and Final Call)
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Amount Received per Share (Credited to Forfeiture A/c): Rs 100−Rs 20=Rs 80
Amount Credited to Forfeiture A/c = Shares Forfeited×Amount Received per Share
Amount Credited to Forfeiture A/c = 1,000 shares×Rs 80 = Rs 80,000