Which of the following statements are true:
Statement 1: Capital reserve can be created out of capital profit.
Statement 2: Reserve capital is uncalled capital which can be called only on the winding up of the company.

Both statements are true

The correct answer is option 3- Both statements are true.

Statement 1: "Capital reserve can be created out of capital profit."- It is true. Capital Reserve is created from capital profits, which are not earned through regular business operations. Examples of capital profits- Profit on sale of fixed assets, Premium on issue of shares or debentures, Profit on revaluation of assets. These are not distributed as dividends. The balance, if any, left in the Share-Forfeited Account relating to reissued Shares, should be treated as capital profit and transferred to Capital Reserve Account.

Statement 2: "Reserve capital is uncalled capital which can be called only on the winding up of the company."- It is true. A company may reserve a portion of its uncalled capital to be called only in the event of winding up of the company. Such uncalled amount is called ‘Reserve Capital’ of the company. It is available only for the creditors on winding up of the company.

So, both statements are true.