Question

What amount of gain on reissue will be transferred to Capital Reserve under following situations?
(1) 3,000 shares of 10 each of Rakesh were forfeited by crediting 5,000 to Forfeited Shares Account.
Out of these, 1,800 shares were reissued to Mohan for 9 per share as fully paid-up.
final cal​

Answer 1

1200 is the gain that will be transferred to the General Reserve.

Explanation:

We know that Only the share forfeiture on Re-issue shares are transferred in General Reserve. Therefore the share forfeiture of only 1,800( re-issued shares) will be liable for the transfer, the rest remains in the Share Forfeiture A/c until those shares are re-issued.

On 3,000 shares, share forfeiture A/c = Rs. 5,000

On 1 share, share Forfeiture A/c = 5,000/ 3,000

Thus, On 1,800 shares,

share forfeiture = 5,000/3,000 × 1,800 = Rs. 3,000

The total amount to be transferred to Capital Reserve =

Share Forfeiture on 1,800 shares = Rs. 3,000

Less: Loss on Re-issue of 1,800 shares = Rs. (1,800)

Thus, Transfer to Capital Reserve = 1,200

Answer 2

Answer:

hey how it is transfered pls explain me