Share Forfeiture Credit Calculation
When a company forfeits shares, the Share Forfeiture account is credited with the total amount the shareholder has already paid on those specific shares. This represents the money received by the company before forfeiture.
Amount Paid by Mr. X
Mr. X held 200 shares and had paid only the application money.
- Application money per share = Rs. 20
- Number of shares held = 200
The total amount paid by Mr. X on his shares is calculated as follows:
$ Total Amount Paid = (Application Money per Share) \(\times\) (Number of Shares Held) $
$ Total Amount Paid = \(\text{Rs. } 20 \times 200\) $
$ Total Amount Paid = Rs. 4000 $
Share Forfeiture Account Credit
As per accounting principles for share forfeiture, the Share Forfeiture account is credited with the amount actually paid by the shareholder. Therefore, the Share Forfeiture account will be credited by the total amount Mr. X paid.
Credit to Share Forfeiture Account = Rs. 4000
Important Questions from Corporate Accounting
In order to compensate the investors, what kind of debentures are issued at substantial discount and the difference between the nominal value and the issue price is treated as the amount of interest related to the duration of the debentures?
If the value of debentures is less than the value of the net asset taken over, then the difference will be credited to:
The part of capital which is called-up only on winding up is called ______.
From which of the following, companies cannot buy its own shares?
In order to compensate the investors, what kind of debentures are issued at substantial discount and the difference between the nominal value and the issue price is treated as the amount of interest related to the duration of the debentures?
