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

- Total call amount on 3,000 shares: ₹ 8 per share (₹ 10 paid up; ₹ 2 unpaid). - Amount received on forfeited shares: ₹ 8 × 3,000 = ₹ 24,000. - Amount forfeited per share: ₹ 2 (first call balance unpaid); Total forfeited amount: ₹ 2 × 3,000 = ₹ 6,000. - Upon reissue at ₹ 7 per share, ₹ 8 paid up, Capital Reserve is calculated as the difference between the amount received on forfeited shares and the reissue proceeds: \[ Amount received from reissue} = ₹ 7 × 3,000 = ₹ 21,000. \] \[ Capital Reserve} = ₹ 24,000 - ₹ 21,000 = ₹ 15,000. \]