Question : Prarthna Ltd. forfeited 300 shares of Rs.10 each, issued at a premium of Rs.2 for non-payment of the final call of Rs.3. Out of these, 200 shares were reissued at Rs.11 per share. How much amount would be transferred to the capital reserve?
Option 1: Rs.1,400
Option 2: Rs.2,400
Option 3: Rs.1,000
Option 4: Rs.600
Correct Answer: Rs.1,400
Solution : Amount credited to Share Forfeiture A/c = 300 X Rs.7 = Rs.2,100. Amount debited to Share Forfeiture A/c = Nil. Amount transferred to Capital Reserve A/c = [(Rs.2,100/300) X 200 - Nil] = Rs.1,400. Hence, the correct option is 1.
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