Question

The director of Priya Polymer Limited resolved that 200 equity shares of Rs. 100 each be forfeited for non-payment of the second and final call of Rs. 30 per share. Out of these, 150 shares were re-issued at Rs. 60 per share to Monit. The amount of capital reserve will be:

• A. Rs. 4000
• B. Rs. 4500
• C. Rs. 5500
• D. Rs. 5000

Hint:

Forfeited amount is first used to cover reissue discount. Any remaining balance is transferred to Capital Reserve.

Answer 1

The Correct Option is B

Step 1: Share Forfeiture.
- Share Face Value: Rs. 100 each - Number of Shares Forfeited: 200 - Unpaid Amount (Final Call): Rs. 30 per share - Paid Amount: Rs. 70 per share \[200 \times 70 = Rs. 14,000 \text{(Total Forfeited Amount)}\]

Step 2: Share Reissue.
- Number of Shares Reissued: 150 at Rs. 60 each. - Face Value: Rs. 100 each, thus Discount per Share: Rs. 40. - Total Discount on Reissue: \( 150 \times 40 = Rs. 6,000 \).

Step 3: Forfeited Amount Allocation.
- Forfeited Amount for 150 Shares: \( 150 \times 70 = Rs. 10,500 \). - Discount on Reissue Covered: Rs. 6,000. - Remaining Amount Transferred to Capital Reserve: \( 10,500 - 6,000 = Rs. 4,500 \).

Final Result: \[\boxed{\text{Capital Reserve Amount = Rs. 4,500}}\]