The Directors of Tivoli Plastics Ltd, resolved that 200 equity shares of ₹100 each be Forfeited for non-payment of the second and final call of ₹30 per share. Out of these, 150 shares were reissued at ₹60 per share as fully paid-up. How much amount will be transferred to Capital Reserve Account?
Answer & explanation
Correct answer: option 2
The correct answer is option 2- ₹4,500.
Journal entry at the time of forfeiture of 200 shares:
Share capital A/c Dr ₹20,000 (200 x 100)
To share forfeiture A/c ₹14,000 (200 x 70)
To share final call A/c ₹6,000 (200 x 30)
(Shares forfeited)
Journal entry at the time of reissue of 150 shares:
Bank A/c Dr ₹9,000 (150 x 60)
Share forfeiture A/c Dr ₹6,000 (150 x 40)
To share capital A/c ₹15,000 (150 x 100)
(Reissue of shares)
Amount Related to 150 shares = 14,000/200 X 150
= 10,500
Amount used in reissue of shares = 6,000
Amount transferred to capital reserve = 10,500- 6,000
= ₹4,500