Question

Shobhana Ltd. forfeited $30$ shares of $Rs.10$ each fully called up for non-payment of allotment money of $Rs.3$ per share and call money of $Rs.4$ per share. These shares are re-issued for $Rs.8$ per share fully paid. What is the amount to be transferred to Capital Reserve Account?

• A. $Rs.300$
• B. $Rs.60$
• C. $Rs.30$
• D. $Rs.90$

Answer 1

The correct option is C $Rs.30$

A) Entry for Share Forfeiture:

Share Capital A/c [30 X 10]....Rs.300

To Share Forfeiture A/c [30 X 3]....Rs.90

To Calls-in-Arrear A/c [30 X 7]........Rs.210

(B) Entry for Re-issue of Shares:

Bank A/c [30 X 8]....Rs.240

Share Forfeiture A/c [30 X 2]....Rs.60

To Share Capital A/c [30 X 10]....Rs.300

(C) Entry for transfer to Capital Reserve Account:

Share Forfeiture A/c...Rs.30

To Capital reserve Account A/c....Rs.30 (90-60)