If an equity share of Rs. 20 on which Rs. 18 is called-up and Rs. 10 is paid, is forfeited. What will be the equity share capital account amount in the forfeiture journal entry ?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Rs. 18
On forfeiture the entries already made on those shares are reversed, so the Share Capital Account is debited with the amount called up on them, not with the face value and not with the amount received.
Called up = Rs. 18, so Equity Share Capital A/c is debited with Rs. 18
Received = Rs. 10, credited to Share Forfeiture A/c
Not received = Rs. 18 − Rs. 10 = Rs. 8, credited to the unpaid calls (Calls in Arrears)
The Rs. 2 never called up was never credited to share capital, so there is nothing to reverse on it.
NCERT (2026-27 edition): |