Moonrise Co. authorised with Share Capital of Rs.5,00,000 issued 10,000 equity shares of Rs.12 each.
Money was payable as
Rs.4 on Application
Rs.4 on Allotment (including premium)
Rs.4 on 1st and final call.
Applications were received for 12,000 shares and the directors decided to make pro-rata allotment. Mr. Rashidi an applicant for 120 shares, could not pay allotment and call money and Mr. Shantanu a holder of 200 shares failed to pay the call. All these shares were forfeited. Out of these forfeited shares, 150 shares (whole of Rashidi) were issued at Rs.8 per share answer following questions on the basis of above, answer from question.
Amount transferred to Capital Reserve will be
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Rs.480
The amount transferred to Capital Reserve is the money received (excluding premium) on the forfeited shares that have been reissued, less the discount allowed on their reissue.
Shares reissued = 150: all 100 of Rashidi's shares and 50 of Shantanu's
Received from Rashidi = application money on 120 shares = 120 × Rs. 4 = Rs. 480 (the excess on the 20 shares not allotted was kept for allotment)
Received from Shantanu per share, excluding premium = Rs. 4 (application) + Rs. 2 (allotment less premium) = Rs. 6
Received on 50 of Shantanu's shares = 50 × Rs. 6 = Rs. 300
Total received on the reissued shares = Rs. 480 + Rs. 300 = Rs. 780
Less: Discount on reissue = 150 × (Rs. 10 − Rs. 8) = Rs. 300
Capital Reserve = Rs. 780 − Rs. 300 = Rs. 480
The forfeited amount on Shantanu's remaining 150 shares (150 × Rs. 6 = Rs. 900) stays in Share Forfeiture Account until those shares are reissued.
NCERT (2026-27 edition):
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