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:

When shares are reissued at a discount, the loss on reissue is deducted from the forfeited amount, and the remaining balance is transferred to the Capital Reserve Account.

Answer 1

The Correct Option is C

1. Forfeited Amount per Share: Amount already paid per share = ₹ 8 (called-up) - ₹ 2 (unpaid first call) = ₹ 6. 2. Total Forfeited Amount: \( \text{Total forfeited amount} = 3,000 \times ₹ 6 = ₹ 18,000. \) 3. Loss on Reissue: Reissue price per share = ₹ 7. Paid-up value per share = ₹ 8. Loss per share on reissue = ₹ 8 - ₹ 7 = ₹ 1. Total loss on reissue = \( 3,000 \times ₹ 1 = ₹ 3,000. \) 4. Amount Transferred to Capital Reserve: Amount transferred to Capital Reserve = Total forfeited amount - Loss on reissue: \[ \text{Capital Reserve} = ₹ 18,000 - ₹ 3,000 = ₹ 15,000. \]