A company forfeited 300 shares of ₹10 each (₹9 called up) on which ₹4 of allotment and the first call of ₹2 has not been received. Out of these, 100 shares were re-issued as fully paid up for ₹9 per share. How much amount will be transferred to the share forfeiture account by the company?

₹900

The correct answer is option 4- ₹900.

To find the amount transferred to the Share Forfeiture Account, we need to calculate how much the company had actually received from the shareholders on the forfeited shares before they were forfeited.

Face Value: ₹10

Called-up Value: ₹9

Unpaid Amount: ₹4 (Allotment) + ₹2 (First Call) = ₹6

Paid-up Amount (Forfeited Amount): Called-up Value (₹9) - Unpaid Amount (₹6) = ₹3 per share

Thus, the amount forfeited per share is ₹3. The company forfeited 300 shares:

$$\text{Total Amount Transferred to Share Forfeiture A/c} = 300 \times ₹3 = ₹900$$

Journal Entry at the time of forfeiture:

Share Capital A/c Dr. ₹2,700
  To Share Forfeiture A/c ₹900
  To Share Allotment A/c ₹1,200
  To Share First Call A/c ₹600

Thus, ₹900 is transferred to the Share Forfeiture Account.

Note: The effect of reissue on share forfeited account is not considered while answering this question because the question specifically asks for the amount “transferred to the Share Forfeiture Account.” This transfer occurs at the time of forfeiture, when the amount already received from shareholders is credited to the Share Forfeiture Account. During reissue, the Share Forfeiture Account is debited/adjusted for discount on reissue or transferred to Capital Reserve; no additional amount is transferred to the Share Forfeiture Account. Therefore, only the forfeiture entry is relevant for determining the answer.