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What amount of gain on reissue will be transferred to Capital Reserve in the following situations? (i) 3,000 shares of ₹10 each of Rakesh were forfeited, crediting ₹5,000 to the Forfeited Shares Account; of these, 1,800 shares were reissued to Mohan at ₹9 per share, fully paid-up. (ii) Z Ltd. forfeited 20 shares of ₹100 each (₹60 called-up), issued at par, to Shiv, on which he paid ₹20 per share; of these, 15 shares were reissued to Rajesh as ₹60 paid-up for ₹45 per share.
(i) Discount on reissue of 1,800 shares (₹10 – ₹9 = ₹1 each) = 1,800 × ₹1 = ₹1,800. Forfeited amount attributable to the 1,800 reissued shares = 5,000 × 1,800/3,000 = ₹3,000. Gain transferred to Capital Reserve = 3,000 – 1,800 = ₹1,200.
(ii) Discount on reissue of 15 shares (₹60 – ₹45 = ₹15 each) = 15 × ₹15 = ₹225. Forfeited amount attributable to the 15 reissued shares = (20 × ₹20) × 15/20 = 400 × 15/20 = ₹300. Gain transferred to Capital Reserve = 300 – 225 = ₹75.
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "T.S. Grewal Class 12 Vol 2 Chapter 1 Q.62 - Share Capital", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 1 - Share Capital.
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
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