Question

X Ltd. forfeited 100 shares of 100 each for non-payment of the allotment money of 15 per share (including premium 5). The first and final call of 50 per share was not yet made. The amount that was debited to share capital account was:

• A. 4,500
• B. 1,500
• C. 10,000
• D. 5,000

Hint:

While forfeiting shares, only the called-up capital (excluding premium and future calls) is debited to Share Capital A/c. Unpaid premium is debited separately to Securities Premium A/c if applicable.

Answer 1

The Correct Option is D

Step 1: Face value of each share = 100
Step 2: Shares forfeited = 100 shares
Step 3: Amount unpaid = Allotment money of 15 per share (includes 5 premium)
Step 4: First and final call of 50 per share was not yet made, so it is not part of called-up capital.
Step 5: Amount called-up = Application ( 25 assumed) + Allotment (excluding premium) = 10
Total = 35 per share called-up capital (excluding premium and future call)
Step 6: Amount debited to Share Capital Account = 100 shares \( \times 50 \) = 5,000
( 25 from application + 25 from allotment including 5 premium; capital part = 10 from allotment + 25 from application = 35)
But we use total called-up capital excluding premium = 50 per share × 100 shares
Share Capital A/c Dr. & 5,000
To Share Allotment A/c & 1,000
To Share Forfeiture A/c & 4,000