Question

T Ltd. forfeited 500 equity shares of Rs. 10 fully called-up, held by Mr. Ram for non-payment of first call of Rs. 5 and final of Rs. 3 each. However, he paid application money @ Rs. 2 per share. These shares were reissued at Rs. 10 each. On reissue, amount to be transferred to Capital Reserve Account will be _____.

• A. Rs. 1,500
• B. Rs. 2,500
• C. Rs. 500
• D. Rs. 1,000

Answer 1

The correct option is D Rs. 1,000

Here, 500 shares were forfeited of Rs 10 each and there was non-payment of Rs 5 on first call and Rs 3 on final which makes total non-payment to be Rs 8 per share which makes it Rs 4000. The application money was paid at Rs 2 per share i.e. total of Rs 1000. The non paid share was reissued at Rs 10 each i.e. Rs 5000. 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 5000- Rs 4000 i.e. Rs 1000.