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Bajaj Sales Ltd. issues 20,000 equity shares of Rs. 20 each to the public. The amount is payable as,

On application Rs. 4 per share

On allotment Rs. 4 per share

On first call Rs. 6 per share

On final call Rs. 6 per share

All money has been received on shares. Only one shareholder, who has 200 shares could not pay allotment money and his shares have been forfeited before making first call. Forfeited shares have been re-issued at Rs. 18 fully paid-up. What is the amount of capital reserve?

Solution

✅ Correct Option: 2

The defaulter paid only application money. Amount forfeited = 200×4=800200 \times 4 = 800.

On reissue at Rs. 18 fully paid (face value Rs. 20), discount allowed = 200×(20−18)=400200 \times (20 - 18) = 400.

Capital Reserve = Forfeited amount - Discount on reissue = 800−400=400800 - 400 = 400.

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