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 the Capital Reserve Account will be:
Options:

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

Hint:

When reissuing forfeited shares, calculate the forfeited amount utilized and transfer the remaining balance to the Capital Reserve Account.

Answer 1

The Correct Option is A

1. Forfeiture Amount for 1,000 Shares: - Amount called up per share: ₹ 10 - Amount unpaid per share (Final call): ₹ 2 - Amount received per share before forfeiture: ₹ 8 - Total amount forfeited: \[ \text{Forfeiture Amount} = 1,000 \times ₹ 8 = ₹ 8,000 \] 2. Reissue of 800 Shares: - Reissue price per share: ₹ 11 - Total amount received on reissue: \[ \text{Reissue Amount} = 800 \times ₹ 11 = ₹ 8,800 \] 3. Nominal Value of Reissued Shares: - Nominal value per share: ₹ 10 - Total nominal value: \[ \text{Nominal Value} = 800 \times ₹ 10 = ₹ 8,000 \] 4. Utilization of Forfeited Amount: - Forfeited amount utilized per share (to make shares fully paid): ₹ 2 - Total forfeited amount used for reissued shares: \[ \text{Utilized Forfeiture Amount} = 800 \times ₹ 2 = ₹ 1,600 \] 5. Excess Forfeiture Amount Transferred to Capital Reserve: - Total forfeited amount: ₹ 8,000 - Forfeited amount used: ₹ 1,600 - Remaining amount transferred to Capital Reserve: \[ \text{Capital Reserve} = ₹ 8,000 - ₹ 1,600 = ₹ 6,400 \] --- Final Answer: The amount credited to the Capital Reserve Account is \( \mathbf{₹ 6,400} \).