Practicing Success
Eicher Ltd. issued 50,000 shares of ₹10 each at a premium of ₹5 per share payable as follows:
Application were received for 72,000 shares. Directors allotted 50,000 shares to the applicants applying for 65,000 shares, the remaining applications being refused. Money overpaid on application was utilised towards sum due on allotment. All the money was duly received with the exception of first call from Rahul, who applied for 2,600 shares. Due to non payment of 1st call his share were forfeited immediately. Later on these share were re-issued at minimum issue price. On the basis of following case study, answer the question. |
Determine the amount to be transferred to Capital Reserve on reissue of Rahul's Shares. |
₹7,800 ₹6,000 ₹1,800 Nil |
Nil |
The correct answer is Option (4) - Nil. On forfeiture this journal entry will be passed- Share Capital A/c Dr. ₹16,000 (called up amount) On reissue this journal entry will be passed- Bank A/c Dr.(2000 x 8) 16000 No amount is transferred to capital reserve. |