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      Question

      ABC Ltd forfeited 200 equity shares of Rs. 10 each for

      non-payment of first call money @ Rs. 2 each. The company has called-up Rs.8 on these shares as Application money at Rs. 2 per share, allotment money at Rs. 4 per share and now Rs.2 as first call money. What is the amount by which the equity share capital be debited in this case?
      A Rs.2000 Correct Answer Incorrect Answer
      B Rs.1600 Correct Answer Incorrect Answer
      C Rs.1200 Correct Answer Incorrect Answer
      D Rs.800 Correct Answer Incorrect Answer
      E Rs.200 Correct Answer Incorrect Answer

      Solution

      In case of forfeiture of shares, the Share Capital Account will be debited with the called-up value of shares forfeited. The called up value in this case = Rs.8 As such the total amount to be debited is Rs.8*200 shares = Rs.1600 Note: The forfeited shares amount = Rs.6*200 = Rs.1200 (i.e. the amount paid by the shareholder), while Rs.400 (Rs.2*200 shares) will be the amount calls in arrears i.e. not paid.

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