Luxmi industries sued shares of Rs 1000 at a premium of Rs IO per share, payable Rs 20 on application,…
When shares are forfeited for non-payment of calls, the Share Forfeiture Account is credited with the actual amount of capital already received by the company on those…
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Luxmi industries sued shares of Rs 1000 at a premium of Rs IO per share, payable Rs 20 on application, Rs 35 on allotment (including premium) and the balance on the first and final call Mr X who held 200 shares has paid only the application money and these shares were subsequently forfeited by the company In this regard by which amount share forfeiture account will be credited?
Answer and explanation
Correct answer A
When shares are forfeited for non-payment of calls, the Share Forfeiture Account is credited with the actual amount of capital already received by the company on those forfeited shares (excluding any securities premium received). Since Mr. X paid only the application money of Rs. 20 per share on his 200 shares, the Share Forfeiture Account is credited with 200 × Rs. 20 = Rs. 4,000.
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UGC NET Commerce