Question

NUK Ltd. forfeited 1,000 shares of ₹ 10 each, fully called up for non-payment of final call of ₹ 2 per share. 800 of these shares were reissued at ₹ 11 per share fully paid. The amount credited to Capital Reserve Account will be:

• A. ₹ 6,400
• B. ₹ 8,000
• C. ₹ 7,200
• D. ₹ 10,000

Hint:

When forfeited shares are reissued at a premium, the forfeited amount of reissued shares is credited to the Capital Reserve.

Answer 1

The Correct Option is A

1. Forfeiture Amount per Share: Paid amount per share = ₹ 10 (fully called-up) - ₹ 2 (unpaid final call) = ₹ 8. 2. Total Forfeited Amount: \( \text{Total forfeited amount for 1,000 shares} = ₹ 8 \times 1,000 = ₹ 8,000. \) 3. Reissue Details: Number of shares reissued = 800. Reissue price per share = ₹ 11. Total amount received from reissue = \( ₹ 11 \times 800 = ₹ 8,800. \) 4. Capital Reserve Calculation: Forfeited amount on reissued shares = \( ₹ 8 \times 800 = ₹ 6,400. \) The entire forfeited amount of the reissued shares is transferred to the Capital Reserve as no discount is given: \[ \text{Capital Reserve} = ₹ 6,400. \]