Question

C Ltd. forfeited 1,000 shares of ₹100 each, issued at a premium of ₹5 per share (to be paid at the time of allotment) for non-payment of a first call of ₹20 per share. The second and final call of ₹20 has not yet been called. Out of these, 700 shares were re-issued as fully paid-up at a discount of ₹10 per share.
Amount transferred to Capital Reserve will be:

Options

• ₹21,000

• ₹35,000

• ₹49,000

• ₹42,000

Answer 1

₹35,000

Explanation:

	₹
Amount Called up (₹100 less ₹20 for Second Call)	80
Less: Not paid on First Call	(20)
Amount paid on 1,000 shares	60 per share

 

	₹
As such, amount paid (forfeited) on 700 reissued shares @ ₹60	42,000
Less: Loss on Reissue: 700 × ₹10	7,000
Transferred to Capital Reserve	35,000