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?

₹800

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