Question

Fun Ltd. forfeited certain shares on which ₹ 7 were paid and final call of ₹ 3 was not paid. Out of these 6,000 shares were reissued at ₹ 8 per share as fully paid-up. Balance in Share Forfeited Account after reissue was ₹ 28,000. Number of shares forfeited were ___(i)___ shares and amount transferred to Capital Reserve was ₹ ___(ii)___.

Options

• (i) 4,000 shares; (ii) ₹ 12,000

• (i) 10,000 shares; (ii) ₹ 42,000

• (i)8,000 shares; (ii) ₹ 30,000

• (i) 10,000 shares; (ii) ₹ 30,000

Answer 1

(i) 10,000 shares; (ii) ₹ 30,000

Explanation:

1. Number of Shares Forfeited = Number of Forfeited Shares Reissued + Number of Forfeited Shares Not Yet Issued

= 6,000 Shares (Reissued) + 4,000 Shares (Not Yet Issued)

= 10,000 Shares

[(₹ 28,000/₹ 7 (Forfeited Amount)]

2. Amount transferred to Capital Reserve = Amount Forfeited on Reissued Shares = 6,000 Shares × 7

= ₹ 42,000

Amount transferred to Capital Reserve = ₹ 42,000 − ₹ 12,000  = ₹ 30,000

(6,000 shares × ₹ 2, Discount on Reissue).