Multiple choice

XYZ Ltd. forfeits 1000 shares of Rs. 10 each on which a shareholder has paid only Rs. 2 on application but failed to pay Rs. 3 on allotment and Rs. 3 on first and final calls. Which is the correct entry for forfeiture?

  1. Share Capital A/c - 10,000 To Share Allotment A/c - 3,000 To Share First and Final Call A/c - 5,000 To Share Application - Rs. 2,000

  2. Share Capital A/c - 2,000 To Forfeited Share A/c - 2,000

  3. Share Capital A/c 10,000 To Share Allotment A/c - 3,000 To Share First and Final Call A/c - 5,000 To Forfeited Share A/c - 2,000

  4. Share Capital A/c 8,000 To Share Allotment A/c 3,000

    To Share First and Final Call A/c - 5,000
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Forfeiture of 10,000 shares for non-payment of allotment and call money & unpaid amount credited through Forfeited Share A/c.

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