Question

KLB Ltd. forfeited 3,000 shares of ₹ 10 each, ₹ 8 per share called up for non-payment of first call of ₹ 2 per share. All these shares were reissued at ₹ 7 per share, ₹ 8 paid up. The amount transferred to Capital Reserve Account will be:

• A. ₹ 18,000
• B. ₹ 24,000
• C. ₹ 15,000
• D. ₹ 3,000

Hint:

The amount transferred to the Capital Reserve Account is the excess of the forfeited amount over the reissue amount for forfeited shares.

Answer 1

The Correct Option is C

- The total amount called up on 3,000 shares is ₹ 8 per share (₹ 10 paid up - ₹ 2 remaining unpaid). - The amount received on forfeited shares = ₹ 8 × 3,000 = ₹ 24,000. - The amount forfeited on each share = ₹ 2 per share (first call remaining unpaid), so the total amount forfeited = ₹ 2 × 3,000 = ₹ 6,000. - When the shares are reissued at ₹ 7 per share, ₹ 8 paid up, the Capital Reserve will be the difference between the amount received on forfeited shares and the reissue amount: \[ Amount received from reissue} = ₹ 7 × 3,000 = ₹ 21,000. \] \[ Capital Reserve} = ₹ 24,000 - ₹ 21,000 = ₹ 15,000. \]