Question:
600 shares of ₹10 each were issued at 20% premium. Final call of ₹3 not received on 100 shares. What is the forfeiture amount?
600 shares of ₹10 each were issued at 20% premium. Final call of ₹3 not received on 100 shares. What is the forfeiture amount?
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When shares are forfeited, the amount received is considered, and the difference is the forfeiture amount. Always remember to subtract the amount received from the total due.
Updated On: Mar 26, 2026
- ₹2000
- ₹1800
- ₹900
- ₹1000
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The Correct Option is C
Solution and Explanation
To determine the forfeiture amount for the shares in question, follow these steps:
- Calculate the Issue Price per Share:
- Face value of each share = ₹10
- Premium on each share = 20% of ₹10 = ₹2
- Total issue price per share = ₹10 + ₹2 = ₹12
- Understand the Final Call Scenario:
- Final call not received on 100 shares.
- Final call amount per share = ₹3
- Total final call amount not received = 100 shares × ₹3 = ₹300
- Forfeiture Amount Calculation:
- Forfeiture is the amount of money received on the shares that are being forfeited excluding calls that were not received.
- Total amount paid per forfeited share (excluding final call) = Total issue price - Final call = ₹12 - ₹3 = ₹9
- Total forfeiture amount = 100 shares × ₹9 = ₹900
The correct answer is ₹900.
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