Arrange the following events (in relation to the issue of shares) in a logical order.(A) Transfer to capital reserve.(B) Forfeiture of share.(C) Calls in arrears.(D) Re-issue of share.Choose the correct answer from the options given below:
- A(A), (B), (C), (D)
- B(A), (B), (D), (C)
- C(B), (A), (D), (C)
- D(C), (B), (D), (A)
Solution & Step-by-step Explanation
The chronological lifecycle sequence of defaulted share elements is:A shareholder fails to pay called-up amounts, resulting in Calls in arrears (C).The board cancels ownership, leading to the Forfeiture of shares (B).The forfeited shares are sold to another buyer, which is the Re-issue of shares (D).The net remaining surplus capital profit left in the share forfeiture account is moved to the Capital Reserve account (A).The precise sequence is (C), (B), (D), (A).