Question : A company forfeited 700 shares of Rs. 10 each, on which only Rs. 5 per share was paid. Of these 200 shares were re-issued at Rs. 9 per share. Amount from share forfeiture account to capital reserve will be transferred-
Option 1: Rs. 800
Option 2: Rs. 200
Option 3: Rs. 3,500
Option 4: Rs. 2,500
Correct Answer: Rs. 800
Solution : Answer = Rs. 800
Share forfeiture account is credited by Rs. 1,000 (Rs. 200 x 5).
Share forfeiture account is debited by Rs. 200 (Rs. 200 x 1).
The amount transferred to the capital reserve will be Rs. 800.
Hence, the correct option is 1.