Question

A company makes an issue of $10,000$ equity shares of Rs. $100$ each, payable as follows:
On application and allotment Rs. $50$
On first call Rs. $25$
On second and final call Rs. $25$ members holding $400$ shares did not pay the second call and the shares were dully forfeited $300$ of which are reissued as fully paid at Rs. $80$ per share. Amount transferred to Capital reserve will be _______.

• A. $16,500$
• B. $15,000$
• C. $10,000$
• D. None

Answer 1

Answer: (A)

$16,500$

Equity share capital A/c Dr(400*100) 40,000

To Share forfeiture account (400*75) 30,000

To calls in arrear account (400*25) 10,000

(Being share forfeited)

Bank A/c Dr.(300*80) 24,000

Share Forfeiture A/c Dr 6000

To Share capital A/c 30,000

(Being shares forfeited re-issued)

Shares forfeiture A/c Dr (30,000-6000) 16,500

To Capital Reserve A/c 16,500

(Being balance in share forfeiture account transferred to capital reserve)