Company Accounts

Share Capital

Hard

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.

120 shares

200 shares

150 shares

100 shares

✅ Correct Option: 4

Securities Premium Reserve is debited at forfeiture only when the premium was not actually received from the shareholder. The premium here was payable on allotment.

Sharma (100 shares) did not pay allotment, so premium was not received. Premium A/c must be reversed for 100 shares.

Verma paid his allotment in full (only call unpaid), so premium is already received and is not reversed.

Hence SPR is debited for 100 shares.

Question 46

The amount received on allotment was

Question 47

The amount transferred to Capital Reserve would be

Question 48

The amount received on First and Final call is

Question 49

The amount of forfeiture left over after reissue will be

At the time of forfeiture security premium reserve a/c will be debited for _______ shares.

Solution

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