Higher Financial Accounting
(HFA)
MCQS - Issue of shares consideration other than cash
1. A share of Rs. 100 each is forfeited for non-payment of allotment money of 750 (including premium Rs.20) and first and final call of Rs.20. Amount credited to share Forfeited Account will be
A. Rs. 50
B. Rs. 30
C. Rs. 20
D. Rs. 80
2. A share of Rs. 100 each issued at 10% discount is forfeited for non-payment of first and final call of Rs. 20 and is re-issued for Rs.80 credited as fully paid up. The amount of discount to be debited to share forfeited A/c is
A. Rs. 10
B. Rs. 20
C. Rs. 30
D. Rs. 60
3. Z Ltd. issued 1,50,000 shares of Rs.100 each at discount of 10%. Mr. Gopi to whom 300 shares were allotted, failed to pay the final call of Rs.30 per share and hence all the share are forfeited. What amount is transferred to share forfeiture A/c?
A. Rs.9000
B. Rs.21,000
C. Rs.18,000
D. Rs.27,000
4. If shares issued at premium are forfeited for non-payment of call money including premium amount then at the time of forfeiture of such shares.
A. Share premium A/c will be debited in respect of unpaid premium amount.
B. Share premium A/c will be credited in respect of unpaid premium amount.
C. Outstanding calls A/c will be debited in respect of unpaid premium amount.
D. Outstanding calls A/c will be credited in respect of unpaid premium amount.
5. As per schedule lll of the companies Act, 2013, forfeited shares A/c will be
A. Added to paid up capital
B. Deducted from paid-up capital
C. Shown as a capital reserve
D. Shown as a revenue reserve
6. The discount allowed on re-issue of forfeited shares is debited to.
A. General reserve A/c
B. Capital reserve A/c
C. Revaluation reserve A/c
D. None of these
7. When shares are forfeited, the share capital A/c is debited with and the shares forfeited account is credited with
A. Paid-up capital of shares forfeited, calls up capital of shares forfeited
B. Called up capital of shares forfeited, call-in-arrears of shares forfeited
C. Called up capital of shares forfeited, Amount received on shares forfeited
D. Calls-in-arrears of shares forfeited, Amount received on shares forfeited.
8. Which of the following statements is false?
A. The forfeited shares should not be issued at a premium.
B. On forfeiture of shares, share or security premium A/c is not debited with the amount of premium received.
C. Shares cannot be issued at a discount,
D. Share premium cannot be transferred to capital reserve.
9. At the time of forfeiture of shares which were originally issued at a premium and fully collected, the accounting entry will be
(I) A debit share capital A/c with the called -up value of shares forfeited
(II) A credit share forfeiture A/c with the amount received on forfeited shares
(III) A credit premium on issue of shares with the amount of premium received on forfeiture Shares
(IV) A credit calls-in-arrears with the amount due but not paid on forfeited shares
A. Both (I) & (IV)
B. Both (IV) & (III)
C. Both (I), (II) & (IV)
D.a (I), (II), (III), & (IV)
10. A company forfeited 30 equity shares of Rs.10 each fully called up, for non-payment of allotment money of Rs.4 each. If these shares are re-issued at Rs.7 per share fully paid, the amount transferable to capital reserve will be
A. Rs.300
B. Rs.60
C. Rs.90
D. Rs.30
11. Z Ltd issued 20,000 shares of Rs.10 each. The called up value per share was Rs. 8. The Company forfeited 300 shares of Mr. A for non-payment of 1st call money of Rs.2 per share. He paid Rs.6 for application and allotment money. On forfeiture, the share capital A/c will be
A. Debited Rs.2,400
B. Debited by Rs.2,000
C. Credited by Rs.1,800
D. Debited by Rs. 2,200
12. A Ltd issued shares of Rs.10 each at a discount of 10%. Mr. B purchased 60 shares and paid Rs. 2 on application but did not pay the allotment money of Rs.3. If the company forfeited his entire shares, the forfeiture A/c will be credited by
A. Rs. 180
B. Rs. 162
C. Rs. 120
D. Rs. 1.8
13. Alfa Ltd issued shares of Rs.10 each at a discount of 10%. Mr. C purchased 30 shares and paid Rs.2 on application but did not pay the allotment money of Rs.3. IT the Company forfeited his entire shares, the forfeiture A/c will be credited by
A. Rs. 90
B. Rs. 81
C. Rs. 60
D. Rs. 54
14. A Company forfeited 1,000 shares of Rs.10 each (which were issued at par) held by Mr. John for non-payment of allotment money of Rs. 4 per share. The called-up value per share was Rs.8. On forfeiture, the amount debited to share capital will be
A. Rs. 10,000
B. Rs. 8,000
C. Rs. 2,000
D. Rs. 18,000
15. X Ltd forfeited 100 Shares of Rs. 10 each issued at a discount of 10% to Ravi on which he had paid Rs.2.50 per share on application and Rs. 2.50 per share on allotment, but on which he had not paid Rs. 2 on First Call. In case of forfeiture, share capital A/c will be debited by
A. Rs.800
B. Rs.700
C. Rs.900
D. Rs.1000
16. Z Ltd forfeited 600 shares of Rs.10 each, on which first call of Rs.3 per share was not received, the second and final call of Rs.2 per share has not yet been called. Forfeited share A/c will be credited with
A. Rs.3,000
B. Rs.2,000
C. Rs.1,500
D. Rs.1,000
17. When shares are forfeited, the share capital A/c is debited with and the share Forfeiture A/c is credited with
A. Paid-up capital of shares forfeited, called up capital of shares forfeited
B. Called-up capital of shares forfeited, calls in arrear of shares forfeited
C. Called-up capital of shares forfeited, Amount received on shares forfeited
D. Calls in arrears of shares forfeited, amount received on shares forfeited
18. Which of the following statements is false?
A. The forfeited shares should not be issued at a premium
B. At the time of forfeiture of shares, share premium should not be debited with The amount of premium already received
C. Shares can be issued at a discount only after one year from the commencement
of business
D. Share premium cannot be utilized to redeem preference Share
19. When shares are forfeited, the share capital A/c is debited with and the share Forfeiture A/c is credited with
A. Paid-up capital of shares forfeited, called up capital of shares forfeited
B. Called up capital of shares forfeited, calls in arrear of shares forfeited
C. Called up capital of shares forfeited, Amount received on shares forfeited
D. Calls in arrears of shares forfeited, Amount received on shares forfeited
20. If on a share of Rs.100 where called up capital is Rs.90, while the Company received Rs.80, the Capital Account should be credited with
A. Rs.100
B. Rs.90
C. Rs. 80
D. Rs.70
21. A holder of 100 shares did not pay the final call and his shares were forfeited. Share capital A/c will be debited by
A. Rs.650
B. Rs.850
C. Rs.1,000
D. Rs.900
22. If a share of Rs.10 issued at a premium of Rs.1, on which Rs.9 (including premium) have been called, and Rs. 7 (including premium) paid is forfeited, the capital A/c should be debited by
A. Rs. 8
B. Rs.9
C. Rs.7
D. Rs.6
23. In case if the shareholders failed to pay the called amount, the Directors cancel their shares. Which A/c should be debited for the paid up value of the share?
A. Share call A/c
B. Share Capital A/c
C. Share forfeiture A/c
D. All of these
24. If the premium on the forfeited share has already been received, then share premium A/c should be
A. Credited
B. Debited
C. Cannot be cancelled
D. None of these
25. On an equity share of Rs. 20, the Company has called up Rs. 18 but shares were forfeited on forfeiture of the shares the share capital A/c would be debited by-
A. Rs 20
B. Rs.188
C. Rs. 14
D. Rs. 10
26. A Company issues 50,000 equity shares of Rs. 100 each at a discount of 10% (allowed at the time of allotment) the net amount payable is as follows:
• On application 20
• On allotment 20
• On first call 25
• On final call 25
Shveti holding 100 shares did not pay final call money. His shares were forfeited. Amount credited to forfeited share A/c will be-
A. Rs. 6000
B. Rs. 6500
C. Rs. 5000
D. None of the above
27. Gopal was holding 100 shares of Rs. 10 each of a Company on which he had paid Rs. 3 on application and Rs. 2 on allotment but could not pay Rs. 2 on first call.
Directors forfeited the above share. Share Capital will be debited by:
A. Rs.1000
B. Rs. 700
C. Rs. 500
D. Rs. 800
28. Mr. Rajiv was the holder of 200 shares of 10 each in RPG Ltd upon which Rs. 5 per share had been called up but he had paid only Rs. 2.5 per share thereon. The Company forfeited his shares and afterwards sold them to satbir, credited as Rs. 5 Per share paid for Rs. 900.
The amount to be transferred to Capital reserve is:
A. Rs. 300
B. Rs. 500
C. Rs. 400
D. None of the above
29. On an equity share of Rs. 20, the Company has called up Rs. 18 but a shareholder paid only Rs.14 and his shares were forfeiture on his shares the share forfeited A/c would be
A. Credited by Rs.20
B. Debited by Rs.18
C. Credited by Rs.14
D. Debited by Rs.10
30. X was allotted 30 shares of Rs.10 each issued at a discount of 10%. He paid Rs.2 on application and failed to pay allotment money of Rs.3. Subsequently his shares were forfeited. The accounting entry of forfeiture would be
A. Share capital debit Rs.150, credit share forfeited A/c Rs.60, share allotment A/c, Rs.90
B. Share capital debit Rs.180, credit share forfeited A/c Rs.60, share allotment A/c, Rs.120
C. Share capital debit Rs.180, credit share forfeited A/c Rs.60, share allotment A/c Rs.90, discount A/c Rs. 30
D. Share capital debit Rs.150, credit share forfeited A/c Rs.60, share allotment A/c Rs.60, discount A/c Rs.30
31. X was allotted 50 shares of Rs. 10 each issued at a premium of 10%. He paid Rs.2 on application and failed to pay allotment money of Rs.4 (including premium). Subsequently, his Shares were forfeited. The accounting entry of forfeiture would be
A. Debit share capital A/c Rs. 250, share premium A/c Rs.50, Credit share Allotment A/c Rs.200, Share forfeited A/c Rs.100
B. Debit share capital A/c Rs.300, Credit Share allotment A/c Rs.200, Share forfeited A/c Rs.100
C. Debit share capital A/c Rs.300, Credit share allotment A/c Rs.150, share Forfeited A/c Rs. 50
D. None of the above
32. A Company forfeited 2,000 shares of Rs.10 each (which were issued at par) held by Mr. John for non-payment of allotment money of Rs.4 per share. The called-up value per share was Rs.9. On forfeiture, the amount debited to share Capital?
A. Rs.10,000
B. Rs. 8,000
C. Rs. 2,000
D. Rs.18,000
33. If vendors are issued fully paid shares of 80,000 in consideration of net assets of Rs.60,000, then the balance of Rs.20,000 will be
A. Debited to profit and loss A/c
B. Debited to goodwill A/c
C. Credited to Capital reserve A/c
D. Credited to share premium A/c
34. If vendors are issued fully paid shares of Rs.1,00,000 in consideration of Net Assets of Rs.1,20,000, the balance of Rs.20,000 will be credited to
A. Goodwill Account
B. Capital Reserve Account
C. P&L Account
D. Vendor's Account
35. When shares were issued to promoters, which A/c should be debited:
A. Share Capital A/c
B. Assets Ac
C. Promoters A/c
D. Goodwill A/c
36. X Ltd purchased an automatic butting machine from a vendor for Rs. 1,65,000. The Company allotted him equity shares at a premium of 10% instead of paying him in cash. The vendor will be allotted- equity shares of Rs.10 each
A. 15,000
B. 16,500
C. 13,500
D. 16,000
37. G Ltd acquired assets worth Rs.7,50,000 from H Ltd by issue of shares of Rs.100 at a premium of 25%. The number of shares to be issued by G Ltd to settle the purchase consideration
A. 6,000 Shares
B. 7,500 Shares
C. 9,375 Shares
D. 5,625 Shares
38. Which one of the following statements regarding forfeiture of Shares is not correct ?
A. Forfeited Shares may be re-issued at a discount or at a premium.
B. The title of the new purchaser is not affected by any irregularity in the forfeiture or sale of the shares.
C. Return of allotment of re-issue of forfeited shares is filed with the registrar of companies.
D. Board may consider the request from the defaulting ex-shareholder for the cancellation of forfeiture before the disposal of forfeited shares.
39. 500 shares of Rs. 20 each issued at 5% discount are forfeited for non-payment of allotment and final call money @9 and ? 5 respectively. Account credited to share forfeited A/c is
A. Rs.2,000
B. Rs.2,500
C. Rs. 3,000
D. Rs.7,000
40. Tree Ltd. forfeited 500 shares of Rs. 20 each issued at 5% discount, for non payment of allotment & final call of 9 and Rs. 5 respectively. Amount credited to share Forfeiture A/c will be
A. 3,500
B. 2,500
C. 3,000
D. 4,000
41. Z Ltd issued 10,000 shares of Rs.10 each. The called up value per share was Rs.8. The company forfeited 200 shares of Mr. A for non-payment of 1st call money of Rs.2 per shares. He paid Rs. 6 for application and allotment money. On forfeiture, the share capital A/c will be
A. Debited by Rs. 2,000
B. Debited by Rs.1,600
C. Credited by Rs.1,600
D. Debited by Rs.1,200
42. B Ltd issued shares of Rs.10 each at a discount of 10% Mr. C purchased 30 shares and paid Rs.2 on application but did not pay the allotment money of Rs.3. If the company forfeited his entire shares, the forfeiture A/c will be credited by
A. Rs. 90
B. Rs. 81
C. Rs. 60
D. Rs. 54
43. A Company forfeited 2,000 shares of Rs. 10 each (which were issued at par) held by Mr. John for non-payment of allotment money of Rs.4 per share. The called-up value per share was Rs.9. On forfeiture, the amount debited to share capital will be
A. Rs. 10,000
B. Rs. 8,000
C. Rs. 2,000
D. Rs. 18,000
44. Z Ltd issued 10,000 shares of Rs.10 each. The called up value per share was Rs. 8. The Company forfeited 200 shares of Mr. A for non-payment of 1st call money of Rs.2 Per share. He paid Rs. 6 for application and allotment money. On forfeiture, the share capital A/c will be
A. Debited by Rs.2,000
B. Debited by Rs.1,600
C. Credited by Rs.1,600
D. Debited by Rs.1,200
45. At whom 100 shares of Rs.10 each was allotted at par, paid Rs.3 on application, Rs.3 on allotment but could not pay the first and final call money of Rs.4. His share were forfeited by the directors. The amount to be credited to shares forfeited A/c will be
A. Rs. 500
B. Rs. 400
C. Rs. 600
D. Rs. 1,000
46. Mr. Sharma holding 1000 equity shares of Rs. 10/- each issued at a discount of 10% could pay Rs.3.50 on application, but could not paid the allotment money of Rs.2.5 per share and his shares were forfeited. In the books of the Company, shares forfeited A/c will be credited by
A. Rs.2,500
B. Rs.1,500
C. Rs. 3,500
D. Rs.2,000
47. Anju Ltd forfeited 300 equity shares of Rs. 10 each fully called-up, held by Manju for non-payment of final call @Rs.4 each. However, she paid application money @Rs. 2 per share and allotment money @Rs.4 per share. These shares were originally issued at par. The amount to be credited to share forfeiture A/C Will be
A. Rs.1,200
B. Rs.3,000
C. Rs.4,200
D. Rs. 1,800
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