Arrange the following events (in relation to the issue of shares) in a logical order.

(A) Transfer to capital reserve.
(B) Forfeiture of share.
(C) Calls in arrears.
(D) Re issue of share.

Choose the correct answer from the options given below:

(C), (B), (D), (A)

The correct answer is Option (4) → (C), (B), (D), (A)

• (C) Calls in arrears: This is the initial event that triggers the whole process. It means a shareholder fails to pay the amount due on the shares (the 'call').

• (B) Forfeiture of share: Due to the call being in arrears, the company will legally cancel or take back the shares.

• (D) Re issue of share: The company then sells the forfeited shares to a new shareholder.

• (A) Transfer to capital reserve: The profit made on the reissue (i.e., the excess of the reissue price over the uncollected amount on forfeiture) is a capital gain and must be transferred to the Capital Reserve account. This is the final accounting step.