Accountancy Part AAccounting for Shares

The directors of a company resolved that 400 shares of ₹100 each be f…

The directors of a company resolved that 400 shares of ₹100 each be forfeited for non-payment of final call of ₹30 per share. Out of these, 300 shares were reissued at ₹60 per share. What will be the balance in Shares Forfeited Account after reissue of shares?

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → ₹7,000

Amount received per share before forfeiture = ₹100 − ₹30 = ₹70

Share Forfeiture A/c = 400 × ₹70 = ₹28,000

Forfeited amount on the 300 shares reissued = 300 × ₹70 = ₹21,000

Discount on reissue = 300 × (₹100 − ₹60) = ₹12,000

Transferred to Capital Reserve = 21,000 − 12,000 = ₹9,000

Balance left in Share Forfeiture A/c = 28,000 − 12,000 − 9,000 = ₹7,000 (= 100 shares not reissued × ₹70)

NCERT (2026-27 edition):
Forfeiture of Shares

Extract from the NCERT textbook

NCERT (2026-27 edition):
Reissue of Forfeited Shares – “… Another important point to be noted in this context is that the capital profit arises only in respect of the forefited share reissued, and not on all forefeited shares. Hence, when a part of the forfeited shares are reissued, the whole balance of share forfeiture account cannot be transferred to the capital reserve. In such a situation, it is only the proportionate amount of balance that relates to the forefeited shares reissued which should be transferred to capital reserve, ensuring that the remaining balance in share forefeiture account is proportionate to the amount forefeited on shares not yet reissued.”