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Question
On the forfeiture of 100 shares of ₹50 each, ₹2,500 were credited to share forfeited account. These shares were re-issued at ₹25 per share fully paid up. The amount credited to ‘Capital Reserve Account’ will be:
Options
₹2,500
₹5,000
No amount
₹3,000
MCQ
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Solution
No amount
Explanation:
Forfeited 100 shares of ₹50 each.
Amount credited to Share Forfeiture A/c = ₹2,500 ⇒ forfeiture per share = ₹25.
Reissued at ₹25 fully paid (FV = ₹50) ⇒ Discount = ₹25 per share.
Discount adjusted from forfeiture = 100 × 25 = ₹2,500.
Balance left for transfer = ₹0.
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Chapter 6: Company Accounts - Issue of Shares - OBJECTIVE TYPE QUESTIONS [Page 6.209]
