Question

A company issues 1,00,000 equity shares of ₹10 each at a premium of ₹5, payable as ₹5 on application, ₹5 on allotment (including premium), and ₹5 on first and final call. A shareholder holding 1,000 shares fails to pay the call money. What is the treatment in the company’s books?

A Shares are cancelled immediately
B Shares are forfeited; only premium refunded
C Shares are forfeited; premium is not refunded
D Shares are kept pending as calls-in-arrears indefinitely
E None of these
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