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3,000 shares of Rs. 10 each of Krishna were forfeited by crediting Rs. 5,000 to share forfeiture account.  Out of these, 1,800 shares were re-issued to Radhe for Rs. 9 per share.  The amount to be transferred to capital reserve account will be
  • a)
    Rs. 3,200.
  • b)
    Rs. 2,000.
  • c)
    Rs. 1,800.
  • d)
    Rs. 1,200.
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
3,000 shares of Rs. 10 each of Krishna were forfeited by crediting Rs....
Solution:

Forfeiture of Shares:

- When a shareholder fails to pay the due amount on shares, the company can forfeit the shares.
- Forfeiture means cancellation of shares and the shareholder loses all rights on the shares.
- The forfeited shares can be re-issued to other persons.

Given:

- Number of shares forfeited = 3,000
- Face value of each share = Rs. 10
- Amount credited to share forfeiture account = Rs. 5,000
- Shares re-issued to Radhe = 1,800
- Re-issue price of each share = Rs. 9

Calculation:

- Face value of forfeited shares = 3,000 x Rs. 10 = Rs. 30,000
- Amount credited to share forfeiture account = Rs. 5,000
- Balance amount of forfeited shares = Rs. 30,000 - Rs. 5,000 = Rs. 25,000
- Re-issue price of 1,800 shares = 1,800 x Rs. 9 = Rs. 16,200
- Amount transferred to capital reserve account = Balance amount - Re-issue price = Rs. 25,000 - Rs. 16,200 = Rs. 8,800
- However, as per the Companies Act, only the amount credited to share forfeiture account can be transferred to capital reserve account. Therefore, the actual amount transferred to capital reserve account will be Rs. 5,000.

Final Answer:

- The amount to be transferred to capital reserve account = Rs. 5,000
- Option (d) is the correct answer.
Free Test
Community Answer
3,000 shares of Rs. 10 each of Krishna were forfeited by crediting Rs....
Yes as 5000/3000×1800=3000-1800=1200
i.e.
per share forfeiture amt is 5000/3000
then for 1800 share is 5000/3000×1800=3000

then shares r reissue at 9 per share means loss of rupees 1 per share i.e. 1800 rupees
which will be recovered from forfeiture account
3000-1800
means 1200 will be transferred to capital reserve account
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3,000 shares of Rs. 10 each of Krishna were forfeited by crediting Rs. 5,000 to share forfeiture account. Out of these, 1,800 shares were re-issued to Radhe for Rs. 9 per share. The amount to be transferred to capital reserve account will bea)Rs. 3,200.b)Rs. 2,000.c)Rs. 1,800.d)Rs. 1,200.Correct answer is option 'D'. Can you explain this answer?
Question Description
3,000 shares of Rs. 10 each of Krishna were forfeited by crediting Rs. 5,000 to share forfeiture account. Out of these, 1,800 shares were re-issued to Radhe for Rs. 9 per share. The amount to be transferred to capital reserve account will bea)Rs. 3,200.b)Rs. 2,000.c)Rs. 1,800.d)Rs. 1,200.Correct answer is option 'D'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about 3,000 shares of Rs. 10 each of Krishna were forfeited by crediting Rs. 5,000 to share forfeiture account. Out of these, 1,800 shares were re-issued to Radhe for Rs. 9 per share. The amount to be transferred to capital reserve account will bea)Rs. 3,200.b)Rs. 2,000.c)Rs. 1,800.d)Rs. 1,200.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 3,000 shares of Rs. 10 each of Krishna were forfeited by crediting Rs. 5,000 to share forfeiture account. Out of these, 1,800 shares were re-issued to Radhe for Rs. 9 per share. The amount to be transferred to capital reserve account will bea)Rs. 3,200.b)Rs. 2,000.c)Rs. 1,800.d)Rs. 1,200.Correct answer is option 'D'. Can you explain this answer?.
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