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mediumMCQCUET Accountancy 2025 29 May Shift 22026Accountancy
1 mark

After forfeiture of share, the amount transferred to capital reserve is:

  1. A
    Profit on forfeiture plus loss on reissue of forfeited share.
  2. B
    Amount of securities premium debited on forfeiture.
  3. C
    Profit on forfeiture minus loss on reissue of forfeited share,
  4. D
    Balance of amount not yet called.

Solution & Step-by-step Explanation

When forfeited shares are reissued at a discount, this discount is a loss and is debited to the Share Forfeiture Account. The surplus remaining in the Share Forfeiture Account after reissue is calculated as:

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After forfeiture of share, the amount transferred to capital reserve is:
A
Profit on forfeiture plus loss on reissue of forfeited share.
B
Amount of securities premium debited on forfeiture.
C
Profit on forfeiture minus loss on reissue of forfeited share,
D
Balance of amount not yet called.

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