Which of the following is transferred to Capital reserve?

Profit from sale of goods Premium on issue of shares Profit on forfeiture of shares All of the above

Profit on forfeiture of shares

When shares are forfeited by shareholders due to non-payment of calls, and these forfeited shares are reissued at a higher price (premium), the excess of the reissue price over the amount already paid (including calls in arrears) is considered a profit. This profit arises from the forfeiture and reissue of shares. Since this profit arises from the capital activities of the company, it is often transferred to the Capital Reserve. Capital Reserve is a type of reserve created out of capital profits and is used for various capital-related purposes.