Question

V.D. Ltd. invited applications for issuing 2,00,000 equity shares of ₹10 each at a premium of ₹6 per share. The amount per share was payable as follows: On applications ₹3 (including premium ₹1) On allotment ₹7 (including premium ₹5) On first and final call Balance amount Applications were received for 2,50,000 shares. Application money on 10,000 shares was returned. Shares were alloted to the remaining applicants on pro-rata basis. The company received all the money due on allotment except from Agam, who was allotted 1,000 shares. Her shares were forfeited immediately after allotment. Afterwards, the first and final call was made. Seema the holder of 2,000 shares, did not pay the first and final call on her shares. Her shares were also forfeited. 50% of the forfeited shares, each of Agam and Seema, were reissued as fully paid-up @₹16 per share.

You are requied to answer the following question:

Balance in Reserve and Surplus Account will be ______.

Options

• ₹12,09,000

• ₹5,300

• ₹8,300

• ₹7,200

Answer 1

Balance in Reserve and Surplus Account will be ₹5,300.

Explanation:

• Agam’s 500 reissued shares: forfeited amount = ₹2 × 500 = ₹1,000

• Seema’s 1,000 reissued shares: forfeited amount = ₹4 × 1,000 = ₹4,000

• Plus premium received on application: ₹1 × (500 + 1,000) = ₹1,500

Total amount transferred to Capital Reserve = ₹1,000 + ₹4,000 + ₹300 = ₹5,300