Question

A company forfeited 3,000 shares of ₹10 each, on which only ₹5 per share (including ₹1 premium) has been paid. Out of these few shares were re-issued at a discount of ₹1 per share were and ₹6,000 were transferred to Capital Reserve. How many shares were re-issued?

Options

• 3,000 shares

• 1,000 shares

• 2,000 shares

• 1,500 shares

Answer 1

2,000 shares

Explanation:

When re-issuing forfeited shares:

• Discount allowed = ₹1

• Forfeited amount per share = ₹4

• Capital Reserve = Forfeited amount − Discount

So, amount transferred to Capital Reserve per share = ₹4 − ₹1 = ₹3

Let number of shares re-issued be x

x × 3 = 6,000

`x = 6000/3`

= 2,000 shares were re-issued