150 shares of Mr. Ram of Rs. 10 each issued at a premium of Rs. 4 per share payable with allotment were forfeited for non-payment of allotment money of Rs. 8 per share including premium. The first and final call of Rs. 4 per share was not made. The forfeited shares were reissued at Rs. 15 per share fully paid-up. Calculate the amount transferred to capital reserve.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Rs. 300
Capital Reserve receives the amount forfeited on the shares, less any discount allowed when they are reissued. Here the shares are reissued above face value, so no part of the forfeited amount is used up.
Issue price = Rs. 10 + Rs. 4 premium = Rs. 14 per share
Allotment (including the Rs. 4 premium) = Rs. 8, not paid
First and final call = Rs. 4, not made
Application money received = Rs. 14 − Rs. 8 − Rs. 4 = Rs. 2 per share
Amount forfeited = 150 × Rs. 2 = Rs. 300
Reissue at Rs. 15 fully paid = above face value, so no discount is met from forfeiture
Capital Reserve = Rs. 300
On forfeiture, Share Capital is debited with Rs. 6 per share (called up Rs. 10 less the uncalled Rs. 4), and Securities Premium is debited with Rs. 4 per share, because the premium was due with allotment and never received.
Note: This question is from NCERT (2026-27). NTA sets numerical questions from NCERT too, so do not ignore NCERT while practising numericals.
NCERT (2026-27 edition):
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