Q Ltd. forfeited 300 shares of Rs. 10 each, fully called-up for non-payment of Final Call money of Rs 4 per share. These were subsequently reissued bt the company for Rs 12 per share as fully paid-up. What amount of Forfeited Shares Account is to be transferred to Capital Reserve?

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Solution

Dear Student

Total Call money Received on Shares = Rs 6/- Per share.
Therefore on Forfeiture of Share , Amount transferred to Share forfeiture A/c = 300 x 6 = 1,800/-
On Reissue , Amount Utilised from share forfeiture = Rs 0/- (Because Shares are reissued at price higher than face value)
Amount Transferred to capital reserve = Rs 1,800 - 0 = Rs 1,800/-

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