Question

R Ltd. forfeited 300 equity shares of Rs. 10 fully called-up, held by Mr. X for non-payment of first call of Rs. 2 and final of Rs. 3 each. However, he paid application money @ Rs. 2 per share and allotment money @ Rs. 3 per share. These shares were reissued at Rs. 12 each. Amount to be transferred to Capital Reserve Account is Rs. _____.

• A. 1,500
• B. 3,000
• C. 600
• D. 900

Answer 1

The correct option is A 1,500

Here, 300 shares were forfeited of Rs 10 each and there was non-payment of Rs 2 on first call and Rs 3 on final which makes total non-payment to be Rs 5 per share. The application money was paid at Rs 2 per share i.e. total of Rs 600 and allotment money was paid at Rs 3 per share i.e. Rs 900. The non paid share was reissued at Rs 12 each which means it was more than early issued share. Reissued shares must not be discounted more than the amount forfeited on them. So, amount to be transferred to capital reserve account will be calculated after deducting the amount on unpaid shares from reissued shares i.e. Rs 3000- (Rs 600 +Rs 900) i.e. Rs 1500.