There are two statements marked as Assertion (A) and Reason (R). Mark your answer as per the options given below.

Assertion (A):  Shares that have been forfeited and reissued, gain (profit) if any, is shown under reserve capital.
Reason (R): Gain (profit) on the reissue of forfeited shares is transferred to Capital Reserve and shown under Reserves and Surplus in the Balance Sheet.

Only Reason(R) is correct.

Forfeited shares can be re-issued. Any amount of profit on re-issue is a capital receipt and should be transferred to capital reserve account because this profit is a capital gain for the company.