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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

Solution

✅ Correct Option: 2

At the time of allotment, Share Allotment A/c is debited and Securities Premium is credited for all allotted shares (amount due). Total allotted shares = 10,000; premium = Rs.2 per share. Securities Premium credited at allotment = 10,000 x 2 = Rs.20,000.

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