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?

₹7,000

The correct answer is Option 2 - ₹7,000.

On forfeiture of shares amount received is credited in the share forfeiture account.
Journal entry on forfeiture of shares-
Share Capital A/c Dr.    40,000 (400 x 100) called up amount
   To share forfeiture A/c      28,000 (400 x 70) received amount
   To share final call A/c       12,000 (400 x 30) Not received amount

Journal entry for reissue of shares-
Bank A/c                 Dr. (300x 60) ₹18,000
Share forfeiture A/c Dr. (300 x 40) ₹12,000
       To Share Capital A/c (300 x 100)     ₹30,000

Share forfeiture balance on 400 shares = 28,000
Share forfeiture balance on 300 shares = 28,000/400 x 300
                                                         = 21,000
Share forfeiture Balance used in reissue = 12,000
Remaining balance under Share forfeiture after reissue = 21,000 - 12,000
                                                                                = 9,000
This balance of ₹9,000 of Share forfeiture will be transferred to capital reserve.

* Balance left in the share forfeiture account will be related to those shares which have not been reissued by the company. So, amount forfeited on 300 shares = 21,000
Therefore, forfeited amount on 100 shares = 28,000 - 21,000
                                                              = 7,000