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Moonrise Co. authorised with Share Capital of Rs.5,00,000 issued 10,000 equity shares of Rs.12 each.

Money was payable as

Rs.4 on Application

Rs.4 on Allotment (including premium)

Rs.4 on 1st and final call.

Applications were received for 12,000 shares and the directors decided to make pro-rata allotment. Mr. Rashidi an applicant for 120 shares, could not pay allotment and call money and Mr. Shantanu a holder of 200 shares failed to pay the call. All these shares were forfeited. Out of these forfeited shares, 150 shares (whole of Rashidi) were issued at Rs.8 per share answer following questions on the basis of above, answer from question.

Amount transferred to Capital Reserve will be

Solution

✅ Correct Option: 1

Rashidi (100 shares): paid Rs.480 (application for 120 x 4); amount available towards face value of his 100 shares = Rs.480. Per-share forfeited amount = Rs.4.80. On reissue at Rs.8, discount = Rs.2 per share. Transfer to Capital Reserve = (4.80 - 2) x 100 = Rs.280.

Shantanu (50 of 200 reissued): paid app + allotment face value = Rs.6 per share. Reissue discount = Rs.2. Transfer per share = Rs.4; for 50 shares = Rs.200.

Total Capital Reserve = 280 + 200 = Rs.480.

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