AB Co. Ltd. forfeited Rs. 800 on 100 shares of Rs. 10 each fully paid. Out of the forfeited shares, 50 shares were issued for Rs. 5 each as fully paid. The amount to be transferred to capital reserve will be:

The correct answer is: C. Rs. 650

Explanation:
The amount to be transferred to capital reserve is the difference between the amount received on the reissue of the forfeited shares and

the amount originally received on the issue of the shares. In this case, the amount received on the reissue of the shares is Rs. 250 (50 shares x Rs. 5 each), and the amount originally received on the issue of the shares is Rs. 1000 (100 shares x Rs. 10 each). Therefore, the amount to be transferred to capital reserve is Rs. 650 (Rs. 1000 – Rs. 250).

Option A is incorrect because it is the total amount of the forfeiture.
Option B is incorrect because it is the amount received on the reissue of the forfeited shares.
Option D is incorrect because it is the amount originally received on the issue of the shares.