Multiple choice

ABC Co. issued 50,000 equity shares of Rs.10 at par & amount payable Rs. 5 on application, Rs. 3 on allotment & Rs. 2 on first call. All amount received on time except of 500 shares, on which first call amount is not received. Their shares forfeited and re-issued at Rs. 9 per share. What is the entry of forfeiture recored in the books?

  1. Dr. Share capital a/c 5,000 Cr. Share application a/c 2,500 Cr. Share allotment a/c 1,500 Cr. Share forfeiture a/c 1,000

  2. Dr. Share capital a/c 5,000 Cr. Share first call a/c 1,000 Cr. Share forfeiture a/c 4,000

  3. Dr. Share capital a/c 4,000 Cr. Share forfeiture a/c 4,000

  4. Dr. Share capital a/c 5,000 Cr. Share first call unpaid a/c 1,000 Cr. Share forfeiture a/c 4,000
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Amount paid on application & alottment transfered to share forfeiture, i.e. 4,000 [(500*5) + (500*3)].

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