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The directors of a company forfeited 1000 shares of Rs. 10 each, Rs. 7.50 paid up, for non payment of final call money of Rs. 2.50 per share. 700 of these shares are re-issued @ Rs. 7/- per share. The amount transferred to capital reserve A/c would be:
- a) Rs. 2,500
- b) Rs. 3,150
- c) Rs. 3,500
- d) Rs. 5,400
Correct answer is option `B`. Can you explain this answer?
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Verified Answer
The directors of a company forfeited 1000 shares of Rs. 10 each, Rs. 7...
(1) Share Capital A/c Dr. (1,000 x 10) 10,000
To Share forfeiture A.c (1,000 x 7.50) 7,500
To Calls in arrear A/c (1,000 x 2.50) 2,500
(2) Bank A/c ..Dr. (700 x 7) 4,900
Share forfeiture A/c Dr. (700 x 3) 2,100
To Share Capital A/c (700 x 10) 7,000
(3) Share forfeiture A/c Dr. 3,150
To Capital Reserve 3,150
(75,000 / 1,000 x 700 = 5,250 - 2,100)
Most Upvoted Answer
The directors of a company forfeited 1000 shares of Rs. 10 each, Rs. 7...
Calculation of Forfeiture Amount
Total shares forfeited = 1000
Face value of each share = Rs. 10
Amount paid up = Rs. 7.50
Call money due = Rs. 2.50
Amount forfeited per share = Face value – Amount paid up = Rs. 10 – Rs. 7.50 = Rs. 2.50
Total forfeiture amount = Amount forfeited per share x Total shares forfeited = Rs. 2.50 x 1000 = Rs. 2,500
Calculation of Re-issue Amount
Shares re-issued = 700
Re-issue price per share = Rs. 7
Total re-issue amount = Shares re-issued x Re-issue price per share = 700 x Rs. 7 = Rs. 4,900
Transfer to Capital Reserve
The transfer to Capital Reserve is calculated as follows:
Transfer to Capital Reserve = Forfeiture amount – Re-issue amount
Transfer to Capital Reserve = Rs. 2,500 – Rs. 4,900
Transfer to Capital Reserve = Rs. (-2,400)
Since the transfer to Capital Reserve is negative, it means that there is no transfer to Capital Reserve in this case. Therefore, the correct answer is option B, Rs. 3,150, which is none of the given options.
Total shares forfeited = 1000
Face value of each share = Rs. 10
Amount paid up = Rs. 7.50
Call money due = Rs. 2.50
Amount forfeited per share = Face value – Amount paid up = Rs. 10 – Rs. 7.50 = Rs. 2.50
Total forfeiture amount = Amount forfeited per share x Total shares forfeited = Rs. 2.50 x 1000 = Rs. 2,500
Calculation of Re-issue Amount
Shares re-issued = 700
Re-issue price per share = Rs. 7
Total re-issue amount = Shares re-issued x Re-issue price per share = 700 x Rs. 7 = Rs. 4,900
Transfer to Capital Reserve
The transfer to Capital Reserve is calculated as follows:
Transfer to Capital Reserve = Forfeiture amount – Re-issue amount
Transfer to Capital Reserve = Rs. 2,500 – Rs. 4,900
Transfer to Capital Reserve = Rs. (-2,400)
Since the transfer to Capital Reserve is negative, it means that there is no transfer to Capital Reserve in this case. Therefore, the correct answer is option B, Rs. 3,150, which is none of the given options.
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The directors of a company forfeited 1000 shares of Rs. 10 each, Rs. 7...
Share capital a/c Dr 10000 To share forfeiture a/c 7500 To share finale call a/c 2500
Bank Dr 4900share forfeiture Dr 2100 To share capital 7000
CAPITAL RESERVE{(7500÷1000)-(2100÷700)}×700(7.5-3)×7003150
share capital Dr 3150 To capital reserve 3150
Bank Dr 4900share forfeiture Dr 2100 To share capital 7000
CAPITAL RESERVE{(7500÷1000)-(2100÷700)}×700(7.5-3)×7003150
share capital Dr 3150 To capital reserve 3150
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The directors of a company forfeited 1000 shares of Rs. 10 each, Rs. 7.50 paid up, for non payment of final call money of Rs. 2.50 per share. 700 of these shares are re-issued @ Rs. 7/- per share. The amount transferred to capital reserve A/c would be:a) Rs. 2,500b) Rs. 3,150c) Rs. 3,500d) Rs. 5,400Correct answer is option `B`. Can you explain this answer?
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The directors of a company forfeited 1000 shares of Rs. 10 each, Rs. 7.50 paid up, for non payment of final call money of Rs. 2.50 per share. 700 of these shares are re-issued @ Rs. 7/- per share. The amount transferred to capital reserve A/c would be:a) Rs. 2,500b) Rs. 3,150c) Rs. 3,500d) Rs. 5,400Correct answer is option `B`. 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 The directors of a company forfeited 1000 shares of Rs. 10 each, Rs. 7.50 paid up, for non payment of final call money of Rs. 2.50 per share. 700 of these shares are re-issued @ Rs. 7/- per share. The amount transferred to capital reserve A/c would be:a) Rs. 2,500b) Rs. 3,150c) Rs. 3,500d) Rs. 5,400Correct answer is option `B`. 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 The directors of a company forfeited 1000 shares of Rs. 10 each, Rs. 7.50 paid up, for non payment of final call money of Rs. 2.50 per share. 700 of these shares are re-issued @ Rs. 7/- per share. The amount transferred to capital reserve A/c would be:a) Rs. 2,500b) Rs. 3,150c) Rs. 3,500d) Rs. 5,400Correct answer is option `B`. Can you explain this answer?.
The directors of a company forfeited 1000 shares of Rs. 10 each, Rs. 7.50 paid up, for non payment of final call money of Rs. 2.50 per share. 700 of these shares are re-issued @ Rs. 7/- per share. The amount transferred to capital reserve A/c would be:a) Rs. 2,500b) Rs. 3,150c) Rs. 3,500d) Rs. 5,400Correct answer is option `B`. 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 The directors of a company forfeited 1000 shares of Rs. 10 each, Rs. 7.50 paid up, for non payment of final call money of Rs. 2.50 per share. 700 of these shares are re-issued @ Rs. 7/- per share. The amount transferred to capital reserve A/c would be:a) Rs. 2,500b) Rs. 3,150c) Rs. 3,500d) Rs. 5,400Correct answer is option `B`. 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 The directors of a company forfeited 1000 shares of Rs. 10 each, Rs. 7.50 paid up, for non payment of final call money of Rs. 2.50 per share. 700 of these shares are re-issued @ Rs. 7/- per share. The amount transferred to capital reserve A/c would be:a) Rs. 2,500b) Rs. 3,150c) Rs. 3,500d) Rs. 5,400Correct answer is option `B`. Can you explain this answer?.
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