Rekha, a shareholder holding 500 shares of Rs. 10 each, did not pay the allotment money of Rs. 4 per share (including a premium of Rs. 2) and the first and final call of Rs. 3. Her shares were forfeited after the first and final call. What will be the amount to be shown under Share Forfeiture Account ?
Rekha, a shareholder holding 500 shares of Rs. 10 each, did not pay the allotment money of Rs. 4 per share (including a premium of Rs. 2) and the first and final call of Rs. 3. Her shares were forfeited after the first and final call. What will be the amount to be shown under Share Forfeiture Account ?
Solution
Given
Number of shares = 500
Face value = ₹10 per share
Allotment = ₹4 per share, including ₹2 premium
First & final call = ₹3 per share
Shares were forfeited due to non-payment of allotment + call
The important point is that Share Forfeiture A/c is credited only with the amount actually received on the shares, and not with the amount unpaid.
However, the question does not explicitly state the application money. We can derive it:
Face value = ₹10
Allotment toward share capital = ₹2 (because ₹4 includes ₹2 premium)
Call = ₹3
Therefore, application money toward share capital:
₹10 − ₹2 − ₹3 = ₹5 per share
Amount received on application = 500 × ₹5 = ₹2,500
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