Use the Following Information to Answer Questions
a Company's

question 2

Multiple Choice

Use the following information to answer questions
A company's capital consists of 50 000 ordinary shares issued at $2 and paid to $1 per share.
On 1 September, a first call of 50c was made on the ordinary shares. By 30 September, the call money received amounted to $22 500. No further payments were received, and on 31 October, the shares on which calls were outstanding were forfeited. On 15 November, the forfeited shares were reissued as paid to $1.50 for a payment of $1 per share. The appropriate cash amount from the reissue was received on 19 November. Costs of reissue amounted to $2 000. The company's constitution provided for any surplus on resale, after satisfaction of unpaid calls, accrued interest and costs, to be returned to the shareholders whose shares were forfeited.
-The entry to record the forfeiture of shares is:

• A)
• \(\begin{array}{llll}
• \text { Share capital } & \mathrm{Dr} & 7500 & \\
• \text { First Call-Ordinary shares } & \mathrm{Cr} & & 2500 \\
• \text { Forfeited shares } & \mathrm{Cr} & & 5000
• \end{array}\)
• B)
• \(\begin{array} { l l l l }
• \text { Share capital } & \mathrm { Dr } & 7500 & \\
• \text { First call - Ordinary shares } & \mathrm { Cr } & & 5000 \\
• \text { Forfeited shares } & \mathrm { Cr } & & 2500
• \end{array}\)
• C)
• \(\begin{array} { l l l l }
• \text { Share capital } & \mathrm { Dr } & 5000 & \\
• \text { Forfeited shares } & \mathrm { Cr } & & 5000
• \end{array}\)
• D)
• \(\begin{array} { c c r }
• \text { Forfeited shares } & \text { Dr } & 2500 \\
• \text { Share capital } & \mathrm { Cr } & 2500
• \end{array}\)

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