Question

11. A shareholder allotted to whom 9,000 shares of Rs 10 per share failed to pay first & final of 2 per share. Rs 18,000 to be recorded in the books of company with
(A) Dr. to Calls-in Arrears A/c
(B) Dr. to Share Forfeiture A/C
(C) Cr. to Calls-in Arrears Alc
(D) Cr. to Share Forfeiture A/C​

Answer 1

Answer:

(D) Cr. to Share Forfeiture A/C​

Answer 2

Rs. 18,000 to be recorded in the books of the company with Dr. to Calls-in Arrears A/c. (Option A)

• When a shareholder fails to pay the called-up amount, the amount is shown in the calls-in-arrear account.
• When the company will receive this amount in the future, it will be an asset for the business.
• On failure of paying Rs.18,000 by the shareholder, the Calls-in-arrear account is debited to show an increase in the assets as per the rules of accounting.