Balance of Share Forfeited Account on the forfeited share not yet re-…

The correct answer is Option (1) → Shown in the Shareholder’s Fund

Until the forfeited shares are reissued, the amount already received on them stays in the Share Forfeiture Account and is added to share capital in the Balance Sheet, which is part of Shareholders’ Funds. It is transferred to Capital Reserve only after the shares are reissued.

Option (2) Transferred to Capital Reserve — Incorrect. That happens only for the gain on shares that have been reissued.

Option (3) Transferred to Capital Redemption Reserve — Incorrect. That reserve arises on buy-back or redemption of preference shares.

Option (4) Transferred to General reserve — Incorrect. A capital gain is never taken to a revenue reserve.