\textbf{Case Study Description:}Review the share allotment data for Eicher Ltd. to answer the questions:Eicher Ltd. issued equity shares of each at a premium of per share, payable as follows:\begin{itemize}\item On Application: per share\item On Allotment: per share (including Premium)\item On First Call: per share (including Premium)\item On Final Call: Balance amount\end{itemize}Applications were received for shares. The Directors allotted shares on a pro-rata basis to applicants who applied for shares, rejecting the remaining applications. The excess application money received was adjusted against the amount due on allotment. All amounts due were received except for the first call from Rahul, who had applied for shares. His shares were forfeited immediately after the non-payment of the first call. These forfeited shares were later reissued at the minimum possible reissue price.Determine the amount to be transferred to the Capital Reserve Account upon the reissue of Rahul's shares:
- ARs. 7,800
- BRs. 6,000
- CRs. 1,800
- DNil
Solution & Step-by-step Explanation
Let's calculate the net gain to be transferred to the Capital Reserve step by step:\begin{itemize}\item From our previous calculations, the total balance retained in the Share Forfeiture Account for Rahul's shares is .\item The case study states that these shares were reissued at the \textbf{minimum possible reissue price}.\item The maximum permissible discount that can be offered on the reissue of forfeited shares is equal to the amount already collected on those shares, which is .\item Reissuing the shares at the minimum possible price means the company utilized the maximum allowable discount () to lower the reissue price.\end{itemize}