Question

R Ltd. forfeited 600 shares of ₹100 each ₹70 called up on which Mahesh has paid application and allotment money of ₹50 per share. Of these, 400 shares were re-issued to Naresh as fully paid-up for ₹110 per share. What is the amount to be transferred to Capital Reserve?

Options

• ₹30,000

• ₹36,000

• ₹24,000

• ₹20,000

Answer 1

₹20,000

Explanation:

Forfeited shares = 600; called up ₹70; paid (app + allot) ₹50 = forfeiture per share = ₹50.

Reissued = 400 shares, at ₹110

Transfer to Capital Reserve = forfeiture related to reissued shares
= 400 × ₹50 = ₹20,000.