The director of a limited company resolved to forfeit 1000 equity shares of Rs. 10 each; Rs. 7.50 paid up for non-payment of the final call money of Rs. 2.50 per share. 700 of these forfeited shares were reissued at Rs. 7 per share. The amount to be transferred to the capital reserve would be

The correct answer is D. Rs. 3,150.

The amount received on forfeited shares is transferred to capital reserve. The amount to be transferred to capital reserve is the difference between the amount received on reissue of forfeited shares and the amount paid up on forfeited shares. In this case, the amount received on reissue of forfeited shares is Rs. 700 x Rs. 7 = Rs. 4,900. The amount paid up on forfeited shares is Rs. 7.50 x 1000 = Rs. 7,500. Therefore, the amount to be transferred to capital reserve is Rs. 4,900 – Rs. 7,500 = Rs. 3,150.

Option A is incorrect because it is the amount of the final call money that was not paid. Option B is incorrect because it is the amount of the paid-up capital on the forfeited shares. Option C is incorrect because it is the total amount received on the reissue of forfeited shares.