Question

Arrange the following in a sequence related to the issue and redemption of shares
(A) Forfeiture of shares
(B) Reissue of shares
(C) Calls in arrears
(D) Transfer of share forfeited account balance to capital reserve A/c
Choose the correct answer from the options given below:

• A. (A), (B), (C), (D)
• B. (B), (A), (C), (D)
• C. (C), (A), (B), (D)
• D. (D), (B), (C), (A)

Hint:

Unpaid calls come first, then forfeiture, then reissue, and last the transfer of the forfeiture balance to capital reserve.

Answer 1

The Correct Option is C

Step 1: Work backwards from the last event:
The last event must be the transfer of the Share Forfeited balance to Capital Reserve (D). That transfer is only possible once the forfeited shares have been reissued. So D is at the end, and B is just before it.

Step 2: Place forfeiture before reissue:
Reissue (B) needs shares that were forfeited earlier. So Forfeiture (A) must come before B.

Step 3: Place calls in arrears first:
A company forfeits shares only when a member does not pay a call. Unpaid calls are called calls in arrears. So (C) is the very first event.

Step 4: Join the pieces:
C leads to A, A leads to B, and B leads to D. The sequence is C, A, B, D. Among the four choices only option 3 shows this order.

Final Answer:
The sequence is Calls in arrears, Forfeiture, Reissue, Transfer to Capital Reserve. \[\boxed{\text{(C), (A), (B), (D), i.e. Option 3}}\]