4. 600 shares of Rs.10 each were forfeited for non-payment of Rs.2 per share on first call and Rs.5 per share on
final call. Share forfeiture account will be credited with:
Answers
The question is from accounting of shares
Firstly, we need to make journal entry of forfeiture
Share capital A/c. Dr.(600 × 10) 6000
To forfeited share A/c (600 × 3) 1800
To first call A/c (600 × 2) 1200
To final call A/c. (600 × 5) 3000
Explanation :
We put those amounts in forfeiture A/c which are already received. According to the question, Rs.10 is the called up money and out of it Rs.2 and Rs.5 are non - payment for first and final call. Its means remaining Rs.3 is already received. So, we credit forfeiture A/c with (600 × 3) i.e Rs.1800
Answer :
1800
JOURNAL ENTRY :
If call in arrears account is opened :
Share Capital ac Dr(600*10) 6000
To Calls in arrears ac (600*7) 4200
To Share forfeiture ac(600*3) 1800
( Forfeiture of non-payment of first and final call money)
ie, Share Forfeiture account credited with ₹1800. (6000-4200)
₹5 + ₹2 = 7