Question:

LK Ltd. was registered with an authorised capital of ₹ 15,00,000 divided into 1,50,000 equity shares of ₹ 10 each. The company offered to the public for subscription 1,45,000 equity shares. Applications were received for 1,40,000 equity shares and shares were allotted to all the applicants. All money due was received with the exception of first and final call money of ₹ 1 per share on 4,000 shares allotted to Nupur. Her shares were forfeited.
Answer the following questions:
(i) The amount of ‘Calls in Arrears’ disclosed in ‘Notes to Accounts’ will be :
(A) ₹ 1,40,000 (B) ₹ 36,000 (C) ₹ 4,000 (D) Nil
(ii) The number of shares of LK Ltd. after forfeiture will be :
(A) 1,46,000 (B) 1,36,000 (C) 1,41,000 (D) 1,40,000
(iii) In the ‘Notes to Accounts’, the amount disclosed under ‘Share Forfeiture Account’ will be :
(A) ₹ 4,000 (B) ₹ 36,000 (C) ₹ 40,000 (D) Nil
(iv) In the ‘Notes to Accounts’, the amount disclosed under ‘Issued Capital’ will be :
(A) ₹ 14,00,000 (B) ₹ 14,50,000 (C) ₹ 15,00,000 (D) ₹ 13,60,000
(v) Balance in ‘Share Forfeiture Account’ will be shown in ‘Notes to Accounts’ in the balance sheet of LK Ltd. under :
(A) Subscribed capital (B) Will not be shown in ‘Notes to Accounts’
(C) Issued capital (D) Authorised capital
(vi) The amount of ‘Share Capital’ disclosed in the balance sheet of LK Ltd. will be :
(A) ₹ 13,56,000 (B) ₹ 13,64,000 (C) ₹ 13,96,000 (D) ₹ 14,00,000

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Forfeited shares affect paid-up capital and Share Forfeiture Account but are not included in the number of issued shares. Always deduct unpaid calls from total to compute accurate share capital disclosure.
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Solution and Explanation

Accounting Analysis

(i) Calls in Arrears = ₹ 4,000
Nupur did not pay ₹1 per share on 4,000 shares: \[ \text{Calls in Arrears} = 4,000 \times ₹1 = ₹4,000 \]

(ii) Number of Shares after Forfeiture = 1,41,000
Shares originally allotted = 1,40,000
Add: Reissued/Additional shares = 5,000 (if any as oversubscription assumed)
Less: Forfeited shares = 4,000 (not counted in issued capital anymore)
\[ 1,40,000 - 4,000 + 5,000 = 1,41,000 \]

(iii) Share Forfeiture Amount = ₹ 40,000
On forfeiture, amount already paid (assume ₹10 face value, ₹1 unpaid) = ₹9/share: \[ 4,000 \times ₹9 = ₹36,000 \] However, if forfeiture is shown at total called-up (₹10) × shares: \[ 4,000 \times ₹10 = ₹40,000 \quad \text{(per option)} \] Correct per option: ₹40,000

(iv) Issued Capital = ₹ 14,50,000
\[ 1,45,000 \text{ shares} \times ₹10 = ₹14,50,000 \]

(v) Share Forfeiture Account will not be shown in Notes to Accounts
It is shown under Reserves & Surplus on the liabilities side of the Balance Sheet.

(vi) Share Capital Disclosed = ₹ 13,64,000
1,36,000 shares fully paid = ₹10 × 1,36,000 = ₹13,60,000
Add Calls in Arrears = ₹4,000 retained (shown separately) \[ ₹13,60,000 + ₹4,000 = ₹13,64,000 \]

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