Allahabad company limited forfeited 50 shares of Rs. 10 each. Rs. 6 per share were paid on then. Out of these 10 shares were re-issued at Rs. 6.50 Per share fully paid up. Amount transferred to capital reserve will be

The correct answer is D. 32.50

The amount transferred to capital reserve is calculated as follows:

• Face value of the shares forfeited = 50 x 10 = 500
• Paid-up value of the shares forfeited = 50 x 6 = 300
• Amount received on re-issue of shares = 10 x 6.50 = 65
• Amount transferred to capital reserve = 500 – 300 + 65 = 325

Option A is incorrect because it is the total amount received on re-issue of shares.
Option B is incorrect because it is the paid-up value of the shares forfeited.
Option C is incorrect because it is the face value of the shares forfeited.