question_answer

Read the following hypothetical text and answer the given questions:

Radhe Ltd. was incorporated on 1st April, 2020 with a nominal capital of Rs. 3,00,000 divided into 6,000 equity shares of Rs. 50 each. It purchased assets worth Rs. 1,00,000 from M/s Zen Ltd. In consultation with the vendors, it issued 2,000 shares as fully paid-up to vendors for purchase consideration.

Also, the company offered 2,000 shares for public

subscription of a premium of Rs. 5 per share payable as Rs.15 on application, Rs.15 (including premium) on allotment, Rs.10 on first call and Rs.15 on final call. Applications were received for 1,950 shares which were duly allotted.

Till date final call has not yet been made and all the shareholders have paid except Raju who did not pay his first call money on 200 shares. Shares of Raju were forfeited.

These shares were reissued @ Rs.35 share paid up.

Based on the above information you are required to answer the following questions:

On forfeiture profit on reissue is transferred to:

A) general reserve  

B) capital reserve

C) reserve capital    

D) None of these