Mona Ltd. has Rs. 5 crores capital divided into equity shares of Rs. 10 each. It decided to setup a new plant in Bihar. For this purpose the company issued 10,000 shares of Rs. 10 each at Rs. 11 per share. The money was payable as follows
Rs. 3 on application
Rs. 4 on allotment - (including premium)
Rs. 4 on first and final call
Applications were received for 12000 shares & the directors made pro-rata allotment Mr. Sharma an applicant for 120 shares could not pay the allotment and call money and Mr. Verma, a holder of 200 shares, failed to pay the call money. All these shares were forfeited out of the forfeited shares, 150 shares (the whole of Mr. Sharma's shares being included) were issued at Rs. 8 per share. Answer the following questions:-
At the time of forfeiture security premium reserve a/c will be debited for ______ shares.
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → 100 shares
The premium of Rs. 1 a share was due with the allotment money. On forfeiture the Securities Premium Reserve is debited only for shares whose premium was not received. Mr. Sharma did not pay the allotment money on his 100 allotted shares, so the premium on those 100 shares is reversed. Mr. Verma paid the allotment money (premium included) and failed only on the call, so the premium on his shares stays.
Securities Premium Reserve debited = 100 shares × Rs. 1 = Rs. 100
NCERT (2026-27 edition):
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