A company forfeited 2,000 shares of ₹10 each on which ₹7 has been called up and ₹5 has been paid. Out of these 1,500 shares are reissued for ₹9 as fully paid. What is the amount to be transferred to the Capital reserve account?
Answer & explanation
Correct answer: option 1
The correct answer is option 1-₹6000.
Journal entry on forfeiture-
Share Capital A/c Dr. ₹14,000 (Calledup amount 2000 x 7)
To Share Final Call A/c ₹4,000 (Not received 2000 x 2)
To Share Forfeiture A/c ₹10,000 (2000 X 5 Received amount)
(Forfeiture of 2000 shares)
Journal entry on reissue-
Bank A/c Dr. ₹13,500 (1500 x 9)
Share Forfeiture A/c Dr. ₹1,500 (1500 x 1)
To Share Capital A/c ₹15,000 (1500 x 10)
(Reissue of 1500 forfeited shares)
AMOUNT RELATED TO 1500 SHARES =10,000/2000 X 1500
= 7,500
Amount used in reissue = 1,500
Amount available in share forfeiture = 7,500
Amount transferred to capital reserve = 7,500 - 1,500
= 6,000