600 shares of Rs 10 each were forfeited for non-payment of Rs 2 per share on first call and Rs 5 per share on final call. Share Forfeiture Account will be credited with:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Rs 1,800
On forfeiture, the Share Forfeiture Account is credited with the amount the shareholder has actually paid on the forfeited shares. The unpaid calls are cancelled, not forfeited.
Amount paid per share = Rs 10 − Rs 2 (first call unpaid) − Rs 5 (final call unpaid) = Rs 3
Share Forfeiture A/c = 600 × Rs 3 = Rs 1,800
Share Capital is debited with the full called-up Rs 6,000 (600 × Rs 10), the two calls accounts are credited with the unpaid Rs 4,200 (600 × Rs 7), and the balance of Rs 1,800 goes to Share Forfeiture.
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