Question

Xeno Ltd. issued 25,000 equity shares of \rupee10 each. The amount was payable as follows: \begin{itemize On Application – \rupee4 per share On Allotment – \rupee5 per share On First and Final Call – Balance All the shares offered were applied for and allotted. All the money due on allotment was received except on 1,500 shares. These shares were forfeited immediately after allotment. First and final call was not yet made. At the time of forfeiture, Share Capital Account will be debited by: }

• A. \rupee15,000
• B. \rupee24,000
• C. \rupee13,500
• D. \rupee18,000

Hint:

In share forfeiture, the Share Capital Account is debited by the called-up amount on forfeited shares.

Answer 1

The Correct Option is A

The face value of the shares is \rupee10 each. The forfeiture of shares happens when the holder fails to pay the allotment money. Amount credited to Share Capital Account = Total application + Allotment money received. For 1,500 shares: \rupee10 (face value) × 1,500 = \rupee15,000.