A Ltd. reissued 2,000 shares which were forfeited by crediting Share Forfeiture account by ₹3,000. These shares were reissued at ₹9 Per share fully paid of ₹10. What will be the amount of profit transferred to Capital reserve Account?
Answer & explanation
Correct answer: option 1
The correct answer is option 1- ₹1,000.
Bank A/c Dr.(2,000*9) 18,000
Share forfeiture A/c Dr. 2,000
To Share Capital A/c (2000*10) 20,000
(Being forfeited shares re-issued)
Balance in the share forfeiture is 3,000 and 2,000 is used in the reissue of shares. So, the remaining balance of 1,000 is transferred to capital reserve.
Share Forfeiture A/c Dr. 1,000
To Capital Reserve 1,000
(balance in share forfeiture account transferred to capital reserve)