Practicing Success
Read the passage given below carefully and answer the questions given below on the basis of the information. Nidiya limited was incorporated on 1st April, 2017 with registered office in Mumbai. The capital clause of Memorandum of Association reflected a registered capital of 8,00,000 equity shares of ₹10 each and 1,00,000 preference shares of ₹50 each. |
Which of the following amount is to be transferred to the Capital Reserve A/c in this case? |
₹600 ₹300 ₹900 ₹400 |
₹300 |
The correct answer is option 2- ₹300. Journal Entry on Forfeiture of 300 shares of Ajay will be: Share forfeiture balance on 300 shares = 900 This 300 is capital profit of the company so transferred to capital reserve. |