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Questions and Answers
What was the total amount of money received from the issuance of the shares?
What was the total amount due on each share issued by Asad Ltd.?
How many shares were forfeited from Z?
Which account is credited during the forfeiture of shares?
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What is the amount that Z failed to pay for the first call per share?
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What was the total share capital credited when Asad Ltd. issued the shares?
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What amount was recorded in the Share Allotment A/c when the application and allotment money was received?
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How much was received during the first call from shareholders?
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What was the total amount forfeited for the shares due to Z's non-payment of first and final calls?
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Which of the following accounts would be debited when shares are forfeited?
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What was the total amount received in the Final Call?
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Which account is credited to record the application and allotment money received?
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What was the value of each share issued by Asad Ltd.?
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Study Notes
Share Issuance and Forfeiture
- Asad Ltd. issued 10,000 shares at ₹10 each, totaling ₹100,000 in share capital.
- The share issuance was at par, meaning the shares were sold at their face value.
- The share issue was divided into multiple calls:
- Application: A payment of ₹2 per share was collected upon application.
- Allotment: ₹3 per share was collected upon allotment of shares.
- First call: ₹3 per share was collected as the first installment.
- Final call: ₹2 per share was collected as the final installment.
Share Forfeiture
- Z, a shareholder, was allotted 80 shares.
- Z failed to pay the first and final call on his allotted shares, totaling ₹400 (80 shares x ₹5).
- As a result, Asad Ltd. forfeited Z's shares.
- This forfeiture involved canceling the shares and transferring their value to the share forfeiture account.
- The share forfeiture process removes the shareholder's right to any further share ownership, and potentially any potential dividends.
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Description
Test your understanding of share issuance and forfeiture procedures as illustrated by Asad Ltd. This quiz covers the process of issuing shares, payment calls, and the implications of share forfeiture for shareholders. Assess your knowledge of company share capital management.
