Question

C Ltd. forfeited 5,000 shares of ₹10 each fully called up, on which the holder has paid only the application & allotment money of ₹7 per share. Out of these, 2,000 shares were re-issued in such a way that ₹8,000 were transferred to capital reserve. Shares were reissued for ______.

Options

• ₹4 per share

• ₹10 per share

• ₹3 per share

• ₹7 per share

Answer 1

C Ltd. forfeited 5,000 shares of ₹10 each fully called up, on which the holder has paid only the application & allotment money of ₹7 per share. Out of these, 2,000 shares were re-issued in such a way that ₹8,000 were transferred to capital reserve. Shares were reissued for ₹7 per share.

Explanation:

	₹
Amount forfeited on 2,000 reissued shares = 2,000 × ₹7	14,000
Less: Transferred to Capital Reserve	(8,000)
Loss on Reissue	6,000

Since, loss on Reissue is `6000/2000` = ₹3 per share, shares were re-issued for ₹7 per share.