Moonrise Co. authorised with Share Capital of Rs.5,00,000 issued 10,000 equity shares of Rs.12 each.
Money was payable as
Rs.4 on Application
Rs.4 on Allotment (including premium)
Rs.4 on 1st and final call.
Applications were received for 12,000 shares and the directors decided to make pro-rata allotment. Mr. Rashidi an applicant for 120 shares, could not pay allotment and call money and Mr. Shantanu a holder of 200 shares failed to pay the call. All these shares were forfeited. Out of these forfeited shares, 150 shares (whole of Rashidi) were issued at Rs.8 per share answer following questions on the basis of above, answer from question.
Amount of Security Premium Reserve credited at the time of allotment of Shares will be
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Rs.20,000
The premium of Rs. 2 a share (issue price Rs. 12 less face value Rs. 10) is payable with the allotment money, and Securities Premium Reserve is credited with it when the allotment money falls due, on all the shares allotted.
Shares allotted = 10,000
Premium per share = Rs. 12 − Rs. 10 = Rs. 2
Securities Premium Reserve credited on allotment = 10,000 × Rs. 2 = Rs. 20,000
The premium not received from Rashidi is reversed later, at forfeiture; it does not reduce the amount credited on allotment.
NCERT (2026-27 edition):
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