On January 1, 2024, the Director of X Ltd. issued for public subscription 50,000 equity shares of Rs. 10 each at Rs. 12 per share payable, Rs. 5 on ap - CUET Accountancy MCQ CUET Accountancy 2025 15 May Shift 1 2026 | ExamTest.live

easyMCQCUET Accountancy 2025 15 May Shift 12026CUET Accountancy

1 mark

On January 1, 2024, the Director of X Ltd. issued for public subscription 50,000 equity shares of Rs. 10 each at Rs. 12 per share payable, Rs. 5 on application (including premium), Rs. 4 on allotment and the balance on call on May 01, 2024. The issue was closed on February 10, 2024 by which date applications for 70,000 shares were received. Of the cash received Rs. 40,000 was returned and Rs. 60,000 was applied to the amount due on allotment, the balance of which was paid on February 16, 2024. All the shareholders paid the call due on May 01, 2024 with the exception of an allottee of 500 shares. These shares were forfeited on September 29, 2024 and reissued as fully paid at Rs. 8 per share on November 01, 2024. The company, as a matter of policy, does not maintain a calls-in-arrears account.On Reissue of 500 forfeited shares as fully paid at Rs. 8 per share, what amount will be debited to Shares Forfeiture Account?

Solution & Step-by-step Explanation

When forfeited shares are reissued at a discount, that reissue discount is debited directly to the Share Forfeiture Account.Given values:Number of reissued shares = 500 sharesNominal Face Value per share = Rs. 10 (Reissued as fully paid up)Actual Reissue Price = Rs. 8 per shareCalculate the discount given per share: Discount per share = 10 - 8 = Rs. 2 Calculate the total amount debited to the Share Forfeiture Account: Total Debit = 500 shares \times Rs. 2 = Rs. 1, 000

Try it yourself before checking the explanation above.

On January 1, 2024, the Director of X Ltd. issued for public subscription 50,000 equity shares of Rs. 10 each at Rs. 12 per share payable, Rs. 5 on application (including premium), Rs. 4 on allotment and the balance on call on May 01, 2024. The issue was closed on February 10, 2024 by which date applications for 70,000 shares were received. Of the cash received Rs. 40,000 was returned and Rs. 60,000 was applied to the amount due on allotment, the balance of which was paid on February 16, 2024. All the shareholders paid the call due on May 01, 2024 with the exception of an allottee of 500 shares. These shares were forfeited on September 29, 2024 and reissued as fully paid at Rs. 8 per share on November 01, 2024. The company, as a matter of policy, does not maintain a calls-in-arrears account.On Reissue of 500 forfeited shares as fully paid at Rs. 8 per share, what amount will be debited to Shares Forfeiture Account?

Rs. 1,000

Rs. 2,000

Rs. 3,000

Rs. 4,000

Practice with timed mock tests and track your performance across CUET Accountancy.