How much amount will be transferred to capital reserve if 600 shares are forfeited of ₹10 each, on which first call of ₹3 per share was not received, the second and final call of ₹2 per share has not yet been called. Out of these, 200 shares were reissued as ₹8 paid up for ₹7 per share?
Answer & explanation
Correct answer: option 3
The correct answer is option 3- ₹800.
1) Share Capital A/c (600 x 8) Dr. ₹4,800
To Share First Call A/c (600 X 3) ₹1,800
To Share Forfeiture A/c (600 X 5) ₹3,000
(Forfeiture of 600 shares)
2) Bank A/c Dr. ₹1,400
Share Forfeiture A/c Dr. ₹200
To Share Capital A/c ₹1,600
(Reissue of 200 shares at ₹7 per share)
3) Share forfeiture A/c Dr. ₹800
To Capital Reserve A/c ₹800
(Profit on 200 reissued shares transferred to capital reserve A/c)
* Forfeited amount on 600 shares = ₹3,000
Hence, forfeited amount on 200 shares = 30,00/600 X 200
= ₹1,000
Loss on reissue of shares = 200 X 1
= ₹200
Amount transferred to capital reserve = 1,000 - 200
= ₹800