Jadu Ltd. issued 2,000 shares, which were forfeited by crediting Share forfeiture account by Rs. 3,000. These shares were issued Rs. 9 per share. The amount to be transferred to Capital Reserve account will be
  • a)
    Rs. 3,000
  • b)
    Rs. 2,000
  • c)
    Rs. 1,000
  • d)
    Nil
Correct answer is option 'C'. Can you explain this answer?

CA Foundation Question

Nitin Mishra
Jun 14, 2018
The solution is “Profit on forfeiture = 3000 - Loss on reissue 1000 = Rs. 2000 transferred to Capital Reserve”.
How the loss on reissue became 1000( Rs 1 * no. of shares; no. of shares aint given) 

Himaja Honey
3 weeks ago
Bank a/c                         Dr.18,000
Share forfeiture a/c        Dr.   2,000
            To Equity Share Capital a/c        20,000
[Being 2,000 shares reissued @ Rs.9
per share fully paid up]

Share forfeiture a/c       Dr. 1,000
             To Capital Reserve a/c       1,000
[Being gain on reissue of forfeited
shares transferred to capital reserve]

WORKING NOTES:-
Share forfeiture Cr.           = Rs.3,000
(-)Share forfeiture Dr.        = Rs.2,000
            Capital reserve      = Rs.1,000

Hence amount transferred to capital reserve is Rs.1,000. Therefore option (C) 1,000 is correct.

Shahin Ansari.
Sep 12, 2018
1). share capital A/C.... Dr.20,000To share Forfeited A /C...3,000,To calls in Arear A/C..17,000(Being 2000 share were forfeited) 2.) Bank A/C. Dr. 18,000, Share Forfeited A /C Dr. 2000, To share capital A/C......20,000(Being forfeited share were re -issue @9 each). 3.) share Forfeited A /C.....Dr.1000 To capital Reserve A/C...1000 (Being balance amt. of forfeited share trn.to capital Reserve A/C)

Srsps
4 weeks ago
Bank A/c   Dr.(2000*9)    18,000
Share forfeiture A/c Dr.     2000
         To Share Capital A/c (2000*10)     20,000
(Being forfeited shares re-issued)
Share Forfeiture A/c Dr.  1000
     To Capital Reserve                 1000
(balance in share forfeiture account transferred to capital reserve)

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