A company forfeited 1,000 shares of ₹10 each, ₹8 called up, on which application and allotment of ₹5 was paid. What amount is credited to Share Forfeiture Account?
Answer and explanation
Correct answer: B. ₹5,000
- Step 1: Recall the accounting rule for forfeiture of shares: Share Capital Account is debited with the called-up amount ().
- Step 2: Calls in Arrears Account is credited with the unpaid amount ().
- Step 3: Share Forfeiture Account is credited with the amount actually received on these shares: .
Answer
₹5,000.
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