. MIG Ltd. forfeited 40 shares of * 10 each issued at a premium of 40% to Raj who had applied for 48 shares. After having paid 6 (including 2 premium), he did not pay allotment money of 2 (including 1 premium) and on his subsequent failure to pay the first call of 3 (including * 1 premium) his shares were forfeited. The amount to be credited to Forfeited Shares Account is (a) *288. (b) 200. (c) ₹192. (d) * 160. Inf7 10 issued at a premium of 32, whole amount is called-up and *7 is received, Share Capital
Answers
Answer:
b 200
Explanation:
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Concept:
Share forfeiture-
- Forfeiture of shares refers to the situation in which the issuing company cancels the allotted shares due to the shareholder's failure to pay the subscription amount as requested by the issuing company.
- In the event of share forfeiture, the shareholder loses his or her rights and interests as a shareholder and ceases to be a member of the organisation.
Given:
- shares forfeited = 40
- Share price = 10
- Premium = 4
- shares applied = 48
- allotment money of 2 (including 1 premium)
- first call of 3 (including * 1 premium)
Find:
The amount to be credited in share forfeiture account
Solution:
Application money = 48 x 6 = 288
Application money on share allotted= 40 x 6 = 240
Excess money = 48
Money to Received on allotment = 40 x 2 = 80
( security premium reserve = 40 x 1 = 40,
Allotment = 40 x 1)
It is assumed that the amount received will first be utilized towards the allotment and then towards the security premium reserve.
Therefore,
Allotment Money to be received = (40 x 1) - 40 = NIL
Security Premium Reserve = (40 x 1) - 8 = 32
Hence, forfeiture account = Amount received on application + Amount received on allotment
Forfeiture Account = (40 x 4) + (40 x 1)
Forfeiture Account = 200
Hence, the amount to be credited in share forfeiture account is Rs. 200.
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