Question

EF Ltd. invited applications for issuing 80,000 equity shares of ₹50 each at a premium of 20%. The amount was payable as follows: On Application ₹20 per share (including premium ₹5) On Allotment ₹15 per share (including premium ₹5) On First Call ₹15 per share On Second and Final Call Balance amount Applications for 1,20,000 shares were received. Applications for 20,000 shares were rejected and pro-rata allotment was made to the remaining applicants. Seema, holding 4,000 shares failed to pay the allotment money. Afterwards, the first call was made. Seema paid allotment money along with the first call. Sahaj who had applied for 2,500 shares failed to pay the first call money. Sahaj's shares were forfeited and subsequently 40% shares were reissued to Geeta for ₹38 per share, ₹40 per share paid up. Final call was not made.

Based on above information, you are required to answer the following question:

After the reissue of forfeited shares, amount transferred to Capital Reserve will be ______.

Options

• ₹18,400

• ₹20,000

• ₹10,400

• ₹48,400

Answer 1

After the reissue of forfeited shares, amount transferred to Capital Reserve will be ₹18,400.

Explanation:

Forfeited amount on 800 Reissued shares = `50,000xx(800)/(2,000) = 20,000`	20,000
Less: Loss on Reissue: 800 × ₹2	1,600
Transferred to Capital Reserve	18,400