Arrange the following events in proper order.

(A) Transfer to capital reserve.

(B) Forfeiture of share.

(C) Calls in arrears.

(D) Re issue of share.

Choose the correct answer from the options given below:

The logical sequence of events in share forfeiture and reissue follows this pattern:

Call in Arrears (C) → When a shareholder fails to pay the call money on the due date, the unpaid amount becomes calls in arrears. This is the starting point of the entire process.

Forfeiture of Share (B) → If the defaulting shareholder doesn't pay even after receiving a notice, the company forfeits the shares. Forfeiture can only happen when there are calls in arrears.

Re-issue of Share (D) → After forfeiture, the company reissues these forfeited shares to new shareholders. The shares can be reissued at par, premium, or even at a discount (but discount cannot exceed the amount already received on these shares before forfeiture).

Transfer to Capital Reserve (A) → This is the final step. When forfeited shares are reissued, any gain on reissue is calculated. The gain on reissue (calculated as: Amount received on forfeiture + Amount received on reissue - Called up value per share × Number of shares reissued) is transferred to Capital Reserve account.

The formula for gain transferred to Capital Reserve:

$\text{Gain on Reissue} = \text{Amount forfeited} - \text{Discount allowed on reissue}$

This entire sequence represents the complete lifecycle from default to ultimate gain realization.

Correct sequence: (C), (B), (D), (A)