A company forfeited 400 shares of ₹20 each, ₹15 called up, on which application and allotment money of ₹11 per share has been received. How much amount is to be transferred to the share forfeiture account?
Answer & explanation
Correct answer: option 2
The correct answer is option 2- ₹4,400.
Journal entry on forfeiture of shares-
Share Capital A/c Dr. ₹6,000(400 x 15)
To Share Forfeiture A/c ₹4,400 (400 x 11)
To Share first Call A/c ₹1,600 ( 400 x 4)
₹4,400 is the received amount which will be forfeited and go into the share forfeiture account.