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Commerce Exam > Commerce Notes > Accountancy Class 12 > Worksheet Solutions: Accounting for Share Capital

Worksheet Solutions: Accounting for Share Capital | Accountancy Class 12 - Commerce PDF Download

Very Short Questions (Q1–Q15)

Q1: Kumar Ltd purchased assets worth ₹6,30,000 and agreed to issue fully paid equity shares of ₹100 each in full payment. Calculate the number of shares issued (at par and at 20% premium).
Ans: Number of shares issued = ₹6,30,000 / ₹120 = 5,250 shares.

At par: Number of shares = Total value of assets / Face value per share = ₹6,30,000 / ₹100 = 6,300 shares.
At 20% premium: Issue price per share = ₹100 + 20% of ₹100 = ₹120

Q2: Bansal Heavy Machine Ltd purchased machinery worth ₹3,80,000 by paying ₹50,000 in cash and the balance by issuing equity shares of ₹100 each at ₹110. Calculate the number of shares issued.
Ans: Balance to be paid by shares = ₹3,80,000 - ₹50,000 = ₹3,30,000
Issue price per share = ₹110
Number of shares issued = ₹3,30,000 / ₹110 = 3,000 shares.

Q3: A company forfeited 4,000 equity shares of ₹10 each (fully called up) on which ₹3 per share had been paid on application. 2,000 of these forfeited shares were reissued as fully paid for ₹18,000. Pass necessary journal entries.
Ans: Forfeiture entry:
Dr. Share Capital (4,000 × ₹10) ₹40,000
Cr. Share Forfeiture (4,000 × ₹7) ₹28,000 (amount received: ₹3 per share)
Cr. Calls in Arrears ₹12,000

Reissue of shares (2,000 shares for ₹18,000):
Dr. Bank ₹18,000
Dr. Share Forfeiture (Balancing figure) ₹2,000
Cr. Share Capital (2,000 × ₹10) ₹20,000

Q4: A Ltd issued 1,000 equity shares of ₹10 each at a 10% discount, payable ₹4 on application, ₹3 on allotment, and the balance on first and final call. All shares were fully subscribed and money duly received. Pass the journal entries.
Ans: On application (₹4 × 1,000 shares) ₹4,000
Dr. Bank ₹4,000
Cr. Share Application ₹4,000

On allotment (₹3 × 1,000 shares) ₹3,000
Dr. Bank ₹3,000
Cr. Share Allotment ₹3,000

On first and final call [(₹10 - 10% discount = ₹9) - ₹7 received] = ₹2 × 1,000 = ₹2,000
Dr. Bank ₹2,000
Cr. Share Call ₹2,000

Transfer application and allotment to share capital
Dr. Share Application ₹4,000
Dr. Share Allotment ₹3,000
Dr. Share Call ₹2,000
Cr. Share Capital ₹9,000 (1,000 × ₹9)

Q5: H Ltd issued 5,000 equity shares of ₹100 each. Payable: ₹10 on application, ₹60 on allotment, ₹30 on first and final call. All shares were subscribed, and money received, except the first and final call on 100 shares. Pass the journal entries for the issue.

Ans: Application money received:
Dr. Bank ₹50,000 (5,000 × ₹10)
Cr. Share Application ₹50,000

Allotment money received:
Dr. Bank ₹3,00,000 (5,000 × ₹60)
Cr. Share Allotment ₹3,00,000
First and final call money due: 5,000 × ₹30 = ₹1,50,000; not received on 100 shares = ₹3,000
Dr. Bank ₹1,47,000 (4,900 × ₹30)
Dr. Calls in arrears ₹3,000
Cr. Share Call ₹1,50,000
Transfer application, allotment, call to share capital:
Dr. Share Application ₹50,000
Dr. Share Allotment ₹3,00,000
Dr. Share Call ₹1,50,000
Cr. Share Capital ₹5,00,000

Q6: Disha Ltd forfeited 500 equity shares of ₹100 each issued at 10% premium (₹90 called up) when shareholders failed to pay ₹30 per share on allotment (including premium) and ₹20 on the first call. Out of these, 300 shares were reissued at ₹80 per share fully paid. Pass journal entries.

Ans:

Forfeiture:
Dr. Share Capital (500 × ₹90) ₹45,000
Cr. Calls in arrears (500 × ₹50) ₹25,000 (₹30 allotment + ₹20 call)
Cr. Share Forfeiture ₹20,000 (balance)
Reissue of 300 shares at ₹80:
Dr. Bank ₹24,000 (300 × ₹80)
Dr. Share Forfeiture ₹6,000 (balancing figure)
Cr. Share Capital ₹27,000 (300 × ₹90)

Q7: Random Ltd took over assets of ₹45,00,000 and liabilities of ₹6,40,000 for ₹36,00,000, settling by issuing 12% preference shares of ₹100 each at 15% premium and paying the rest by draft. Pass the entries.

Ans:

Assets and liabilities taken over:
Dr. Assets ₹45,00,000
Cr. Liabilities ₹6,40,000
Cr. Vendor’s Account (balancing figure) ₹38,60,000
Settlement:
Dr. Vendor’s Account ₹38,60,000
Cr. Preference Share Capital (at ₹100) and Securities Premium (₹15 per share)
Cr. Bank/Draft (balancing amount)
Calculate shares issued at 15% premium:
Shares issued = (12% pref shares at ₹115 per share) to cover part payment
Let shares issued = x, then: x × ₹115 + draft = ₹38,60,000
If draft = ₹(difference), then solve accordingly.

Q8: Annex Ltd issued 100,000 equity shares of ₹10 each at 10% premium, payable in full on application. Applications were received for 300,000 shares, and shares were allotted on a pro-rata basis. Pass the necessary journal entries.

Ans:

Bank on application (300,000 × ₹11) ₹33,00,000
Dr. Bank ₹33,00,000
Cr. Share Application ₹33,00,000
Shares allotted on pro-rata: 100,000 shares; excess refunded on 200,000 shares × ₹11 = ₹22,00,000
Dr. Share Application ₹33,00,000
Cr. Share Capital (100,000 × ₹10) ₹10,00,000
Cr. Securities Premium ₹1,00,000
Cr. Bank (Refund) ₹22,00,000

Q9: Ganga Ltd invited applications for 10,000 equity shares of ₹10 each, payable ₹2 on application, ₹3 on allotment, ₹3 on first call, and ₹2 on final call. Applications were received for 15,000 shares, of which 3,000 applications were rejected and the rest were allotted on a prorata basis. Journalise these transactions.

Ans:

Application money received: 15,000 × ₹2 = ₹30,000
Dr. Bank ₹30,000
Cr. Share Application ₹30,000
Transfer application for accepted shares (12,000 shares): ₹24,000
Dr. Share Application ₹24,000
Cr. Share Capital ₹24,000
Refund excess application money (3,000 shares × ₹2 = ₹6,000):
Dr. Share Application ₹6,000
Cr. Bank ₹6,000
Allotment money due: 12,000 shares × ₹3 = ₹36,000
Dr. Bank ₹36,000
Cr. Share Allotment ₹36,000
First call due: 12,000 × ₹3 = ₹36,000
Dr. Bank ₹36,000
Cr. Share First call ₹36,000
Final call due: 12,000 × ₹2 = ₹24,000
Dr. Bank ₹24,000
Cr. Share Final call ₹24,000

Q10: Mukund Ltd invited 50,000 equity shares of ₹10 each at a 10% premium, payable ₹3 on application, ₹3 (incl. premium) on allotment and the balance on the first and final call. Applications were received for 120,000 shares; allotment was done on a prorata basis. Pass the journal entries.

Ans:

Application money received: 120,000 × ₹3 = ₹3,60,000
Dr. Bank ₹3,60,000
Cr. Share Application ₹3,60,000
Application amount transferred to share capital:
Dr. Share Application ₹1,50,000 (50,000 × ₹3)
Cr. Share Capital ₹1,50,000
Allotment money (including premium) due: 50,000 × ₹3 = ₹1,50,000; allotment made on prorata basis
Dr. Bank ₹1,50,000
Cr. Share Allotment ₹1,50,000
First and final call due (balance): ₹10 + 10% premium = ₹11 per share total
Paid application ₹3 + allotment ₹3 = ₹6, thus first and final call = ₹5
Dr. Bank ₹2,50,000 (50,000 × ₹5)
Cr. Share Call ₹2,50,000

Q11: Sunstar Ltd has an authorized capital of ₹20,00,000 divided into equity shares of ₹10 each. It issued 60,000 shares; applications for 58,000 shares were received. All calls were made and duly received except the final call of ₹3 per share on 2,000 shares, which were forfeited. Present the Share Capital in the Balance Sheet and prepare the Notes on Share Capital.

Ans:

Share Capital in BS = Shares issued fully called less forfeiture effects
Notes on Share Capital would show authorized, issued, subscribed, calls in arrear, and forfeiture details for 2,000 shares with ₹3 call unpaid, shares forfeited accordingly.

Q12: Ashoka Ltd issued 1,000 equity shares of ₹20 each at a ₹4 premium, forfeited all shares for non-payment of the final call of ₹2. It reissued 400 of the forfeited shares at ₹14 per share and 200 shares at ₹20 per share. Pass the journal entries and show the amount transferred to Capital Reserve and balance in Share Forfeiture Account.

Ans:

Forfeiture entry debiting share capital and premium accounts and crediting forfeiture account
Reissue entry crediting share capital, debiting bank and forfeiture accounts
Capital reserve = Excess of forfeited amount over loss on reissue
Balance forfeiture = Remaining credit in forfeiture account after transfer to capital reserve.

Q13: Bhushan Oil Ltd forfeited 200 shares of ₹100 each issued at a ₹10 premium for non-payment of allotment of ₹60 (first & final call ₹20 not made). The forfeited shares were reissued at ₹70 each fully paid. Pass necessary journal entries.

Ans:

Forfeiture: Debit share capital and premium, credit allotment and calls in arrears, credit forfeiture account for amounts unpaid
Reissue: Debit bank and forfeiture account, credit share capital for face value.

Q14: Lotus Ltd invited applications for 80,000 equity shares of ₹10 each at a ₹4 premium. Payable: ₹1 application, ₹5 on allotment (including premium), ₹9 on first call (including premium). Applications for 140,000 shares were received and allotted prorata; excess application money adjusted against allotment. Rajiv applied for 1,400 shares but failed to pay allotment; his shares were forfeited. These forfeited shares were later reissued at ₹9 each fully paid. Journalise the above.

Ans:

Application received and transferred to share capital and premium
Refund adjustment against allotment
Forfeiture of shares on non-payment of allotment
Reissue of forfeited shares at ₹9 fully paid.

Q15: Tulip Ltd invited applications for 240,000 equity shares of ₹10 each at a ₹4 premium. Payable: ₹? on application, ₹4 on allotment (including ₹2 premium), ₹6 on first & final call (including ₹2 premium). Applications were received for 300,000 shares and allotted prorata; excess application money adjusted against allotment. Rohini (7,500 shares) failed to pay allotment and call and her shares were forfeited. Pass the journal entries.

Q16: Naman Ltd issued 20,000 equity shares of ₹100 each; ₹25 on application, ₹65 on allotment, ₹10 on first & final call. All shares were fully subscribed and money duly received except that 100 shares did not pay allotment and first call. Pass the journal entries.

Particulars	Debit (₹)	Credit (₹)	Remarks
Bank A/c To Share Application A/c	5,00,000	5,00,000	Application money received (20,000 × 25)
Bank A/c Calls in Arrears A/c To Share Allotment A/c	11,75,000 13,000	11,88,000	Allotment money received (19,900 × 65) 100 shares × ₹65 unpaid
Bank A/c Calls in Arrears A/c To Share Call A/c	1,99,000 1,000	2,00,000	First & final call money received (19,900 × 10)
Share Application A/c Share Allotment A/c Share Call A/c To Share Capital A/c	5,00,000 11,88,000 2,00,000	18,88,000	Transfer money to the share capital

Q17: Kishnu Ltd issued 15,000 equity shares of ₹100 each at a ₹10 premium. Payable: ₹30 on application, ₹50 (including ₹10 premium) on allotment, ₹30 on first & final call. Arun (200 shares) failed to pay the first & final call. His shares were forfeited and later 150 shares were reissued at ₹105. Pass journal entries and show Capital Reserve.

Particulars	Debit (₹)	Credit (₹)	Remarks
Bank A/c To Share Application A/c	4,50,000	4,50,000	Application money received (15,000 × ₹30)
Bank A/c To Share Allotment A/c	7,00,000	7,00,000	Allotment money received (15,000 × ₹50, incl. ₹10 premium)
Bank A/c Calls in Arrears A/c To Share Call A/c	4,44,000 6,000	4,50,000	First & final call money received (14,800 × ₹30), 200 × ₹30 unpaid
Share Application A/c Share Allotment A/c Share Call A/c Securities Premium A/c To Share Capital A/c	4,50,000 6,00,000 4,50,000 1,50,000	16,50,000	Transfer to capital accounts: All premium and received amounts
Share Capital A/c Securities Premium A/c To Calls in Arrears A/c To Share Forfeiture A/c	20,000 2,000	6,000 16,000	Forfeiture of 200 shares: Unpaid call ₹6,000; forfeiture ₹16,000
Bank A/c Share Forfeiture A/c To Share Capital A/c	15,750 1,500	17,250	Reissue of 150 shares @ ₹105 fully paid
Share Forfeiture A/c To Capital Reserve A/c	14,500	14,500	Transfer remaining forfeiture to Capital Reserve

Q18: Arushi Computers Ltd issued 10,000 equity shares of ₹100 each at 10% premium. Payable: ₹20 on application, ₹70 (including premium) on allotment, and ₹30 on first & final call. All shares subscribed; Reena (300 shares) paid the application & allotment but failed to pay the call on 150 shares. These 150 shares were forfeited and reissued at ₹75 per share. Pass journal entries and give Capital Reserve.

Particulars	Debit (₹)	Credit (₹)	Remarks
Bank A/c To Share Application A/c	2,00,000	2,00,000	Application money received (10,000 × ₹20)
Bank A/c To Share Allotment A/c	7,00,000	7,00,000	Allotment money received (10,000 × ₹70 incl. premium)
Bank A/c Calls in Arrears A/c To Share Call A/c	2,95,500 4,500	3,00,000	First & final call money received (9,850 × ₹30) 150 × ₹30 unpaid
Share Application A/c Share Allotment A/c Share Call A/c Securities Premium A/c To Share Capital A/c	2,00,000 6,00,000 3,00,000 1,00,000	12,00,000	Transfer application, allotment, call & premium to capital
Share Capital A/c To Calls in Arrears A/c To Share Forfeiture A/c	4,500 40,500	4,500 40,500	Forfeiture of 150 shares (unpaid ₹30 per share; amount received ₹270 per share)
Bank A/c Share Forfeiture A/c To Share Capital A/c	11,250 15,750	27,000	Reissue of 150 forfeited shares at ₹75 fully paid
Share Forfeiture A/c To Capital Reserve A/c	24,750	24,750	Transfer of excess forfeiture to Capital Reserve

Q19: Raunak Cotton Ltd issued 6,000 equity shares of ₹100 each at a ₹20 premium, payable ₹20 on application, ₹50 on allotment (including premium), ₹30 on first call, and ₹20 on final call. Applications were received for 10,000 shares, and 8,000 were allotted prorata (excess refunded). Rohit (300 shares allotted) failed to pay allotment & calls; Itika (600 shares applied) failed to pay two calls. Both were forfeited. All forfeited shares were sold to Kartika at ₹80 each, fully paid. Pass journal entries.

Ans: Raunak Cotton Ltd – Journal Entries

Particulars	Debit (₹)	Credit (₹)	Remarks
Bank A/c To Share Application A/c	2,00,000	2,00,000	Application money received (10,000 × ₹20)
Share Application A/c To Share Capital A/c To Bank A/c	1,60,000 40,000	1,60,000 40,000	Application money transferred for shares allotted (8,000 × ₹20), refund excess
Bank A/c To Share Allotment A/c	4,00,000	4,00,000	Allotment money received (8,000 × ₹50, incl. ₹20 premium)
Bank A/c To Share First Call A/c	2,10,000	2,10,000	First call money received for shares paid (7,000 × ₹30)
Bank A/c To Share Final Call A/c	1,60,000	1,60,000	Final call money received (8,000 × ₹20, less unpaid)
Share Capital A/c Securities Premium A/c To Calls in Arrears A/c To Share Forfeiture A/c	90,000 18,000 2,55,000 60,000	90,000 18,000 2,55,000 60,000	Forfeiture of 900 shares: Rohit and Itika failed payments on calls and premium
Bank A/c Share Forfeiture A/c To Share Capital A/c	72,000 48,000	1,20,000	Reissue of 900 forfeited shares @ ₹80 each fully paid
Share Forfeiture A/c To Capital Reserve A/c	12,000	12,000	Amount transferred to Capital Reserve

Q20: Carmen Ltd invited 15,000 equity shares of ₹8 each (payable ₹4 application, ₹2 allotment, balance on call). Applications for 20,000 were received; allotted prorata, all money due called. All money was received except the first & final call on 100 shares. Pass journal entries and prepare the Share Capital Schedule in the Balance Sheet.

Carmen Ltd – Journal Entries

Particulars	Debit (₹)	Credit (₹)	Remarks
Bank A/c To Share Application A/c	80,000	80,000	Application money received (20,000 × ₹4)
Share Application A/c To Share Capital A/c To Bank A/c	60,000 20,000	60,000 20,000	Application money transferred for shares allotted (15,000 × ₹4); refund excess
Bank A/c To Share Allotment A/c	30,000	30,000	Allotment money received (15,000 × ₹2)
Bank A/c Calls in Arrears A/c To Share Call A/c	1,19,200 800	1,20,000	First & final call money received (14,900 × ₹8); 100 shares unpaid
Share Application A/c Share Allotment A/c Share Call A/c To Share Capital A/c	60,000 30,000 1,20,000	2,10,000	Transfer all received amounts to share capital

Q21: (Application & Allotment Problem) A Ltd invited 50,000 equity shares of ₹10 each at par, payable ₹3 on application and ₹4 on allotment. Applications for 75,000 shares were received; allotment was done prorata. Excess application money was adjusted towards allotment. Pass journal entries. (Ignore call accounts.)

A Ltd – Journal Entries

Particulars	Debit (₹)	Credit (₹)	Remarks
Bank A/c To Share Application A/c	2,25,000	2,25,000	Application money received (75,000 × ₹3)
Share Application A/c To Share Capital A/c To Bank A/c	1,50,000 75,000	1,50,000 75,000	Application money transferred for allotted shares (50,000 × ₹3); refund excess (25,000 × ₹3)
Bank A/c To Share Allotment A/c	2,00,000	2,00,000	Allotment money received (50,000 × ₹4)
Share Application A/c Share Allotment A/c To Share Capital A/c	1,50,000 2,00,000	3,50,000	Transfer application and allotment monies to share capital

Q22: (Premium Issue) Vani Ltd invited applications for 100,000 equity shares of ₹10 each at 10% premium. Payable: ₹4 on application & allotment (including ₹1 premium), ₹4 on first call, ₹3 on final call. Applications for 150,000 shares were received; allotment prorata (excess adjusted towards calls). Parth (600 shares allotted) did not pay the first call (final call not yet due). Half of his forfeited shares were reissued at ₹8 each fully paid. Pass journal entries (use Calls-in-Arrears/Advance accounts).

Vani Ltd – Journal Entries

Particulars	Debit (₹)	Credit (₹)	Remarks
Bank A/c To Share Application & Allotment A/c	4,00,000	4,00,000	Application & Allotment received (100,000 × ₹4)
Bank A/c To Share First Call A/c	4,00,000	4,00,000	First call received (100,000 × ₹4)
Bank A/c To Share Final Call A/c	3,00,000	3,00,000	Final call received (100,000 × ₹3)
Share Application & Allotment A/c Share First Call A/c Share Final Call A/c Securities Premium A/c To Share Capital A/c	4,00,000 4,00,000 3,00,000 1,00,000	12,00,000	Transfer application, calls, premium to capital
Share Capital A/c Securities Premium A/c To Calls in Arrears A/c To Share Forfeiture A/c	2,400 600	2,400 600	Forfeiture of shares (600 × ₹4 first call not received)
Bank A/c Share Forfeiture A/c To Share Capital A/c	4,800 3,600	8,400	Reissue of forfeited shares @ ₹8 fully paid
Share Forfeiture A/c To Capital Reserve A/c	3,000	3,000	Transfer excess to Capital Reserve

Q23: Shaktimaan Ltd invited 100,000 equity shares of ₹10 each at a ₹2 premium. Payable: ₹4 on application (including ₹0.40 premium), ₹5 on allotment, balance on call. Applications for 180,000 shares were received, of which 30,000 applications were rejected and the rest allotted prorata. Manthan (5,000 shares) failed to pay the first & final call; his shares were forfeited, of which 2,000 shares were reissued at a ₹3 premium. Prepare the Cash Book and pass journal entries.

Shaktimaan Ltd – Journal Entries

Particulars	Debit (₹)	Credit (₹)	Remarks
Bank A/c To Share Application A/c	7,20,000	7,20,000	Application money received (180,000 × ₹4)
Share Application A/c To Share Capital A/c To Bank A/c	4,00,000 3,20,000	4,00,000 3,20,000	Application transferred for 100,000 shares; refund for 80,000 shares
Bank A/c To Share Allotment A/c	5,00,000	5,00,000	Allotment money received (100,000 × ₹5)
Bank A/c Calls in Arrears A/c To Share Call A/c	1,95,000 15,000	2,10,000	First & final call money for 95,000 shares; 5,000 unpaid
Share Capital A/c Securities Premium A/c To Calls in Arrears A/c To Share Forfeiture A/c	50,000 10,000	15,000 45,000	Forfeiture of 5,000 shares, reissue at premium
Bank A/c Share Forfeiture A/c To Share Capital A/c To Securities Premium A/c	6,000 39,000	20,000 25,000	Reissue of 2,000 shares at ₹13, premium ₹3
Share Forfeiture A/c To Capital Reserve A/c	6,000	6,000	Transfer excess to Capital Reserve

Q24: (Share Capital in BS) Narmada Ltd has an authorised capital of ₹10,00,000 (10,000 shares of ₹10). It invited applications for 80,000 shares; received 75,000. All calls were duly made and received except the first and final call of ₹2 per share on 5,000 shares held by Arti, which were forfeited. Prepare the Share Capital figure in the Balance Sheet (Schedule III) and Notes to Accounts for Share Capital.

Narmada Ltd – Journal and Share Capital Notes

Particulars	Debit (₹)	Credit (₹)	Remarks
Bank A/c To Share Application A/c	2,40,000	2,40,000	Application money for 24,000 × ₹10
Bank A/c To Share Allotment/Call A/c	60,000	60,000	Allotment/call received
Share Application/Allotment/Call A/c To Share Capital A/c	3,00,000	3,00,000	Transfer to capital
Share Capital A/c To Share Forfeiture A/c To Calls in Arrears A/c	10,000	8,000 2,000	Forfeiture of 500 shares unpaid

Balance Sheet (Share Capital Section)

Particulars	Amount (₹)
Authorized capital	10,00,000
Issued/subscribed	8,00,000
Called-up capital	8,00,000
Less: Calls in arrears	2,000
Paid-up capital	7,98,000
Add: Share Forfeiture	8,000

Q25: Himalaya Co. Ltd offered 1,20,000 shares of ₹10 each at ₹2 premium (₹3 appl., ₹5 (incl. prem.) allot, ₹2 first call). Applications for 1,50,000 shares were received; 1,20,000 allotted (30,000 rejected). All money received except the second call on 1,000 shares (forfeited and reissued 600 shares at ₹9). Pass entries and show the Capital Reserve.

Himalaya Co. Ltd – Journal Entries

Particulars	Debit (₹)	Credit (₹)	Remarks
Bank A/c To Share Application A/c	4,50,000	4,50,000	Application money received (150,000 × ₹3)
Share Application A/c To Share Capital A/c To Bank A/c	3,60,000 90,000	3,60,000 90,000	Application transferred for 120,000 shares, refund for 30,000
Bank A/c To Share Allotment A/c	6,00,000	6,00,000	Allotment received (120,000 × ₹5 incl. premium)
Bank A/c To Share First Call A/c	2,40,000	2,40,000	First call received (120,000 × ₹2)
Bank A/c Calls in Arrears A/c To Share Second Call A/c	1,18,000 2,000	1,20,000	Second call received for 119,000 shares; 1,000 unpaid
Share Capital A/c Securities Premium A/c To Calls in Arrears A/c To Share Forfeiture A/c	10,000 2,000	2,000 10,000	Forfeiture of 1,000 shares
Bank A/c Share Forfeiture A/c To Share Capital A/c	5,400 3,000	8,400	Reissue of 600 forfeited shares at ₹9
Share Forfeiture A/c To Capital Reserve A/c	2,400	2,400	Transfer excess to Capital Reserve

Q26: Prince Ltd invited applications for 20,000 shares of ₹10 each at a ₹3 premium. Payable: ₹2 appl., ₹5 (incl. ₹3 prem) allot., ₹3 first call, ₹3 final call. Applications for 30,000 shares were received; allotted prorata, excess appl. money adjusted. Mohit (400 shares allotted) failed to pay allotment & first call (forfeited after first call). Joly (600 shares) failed to pay first & second calls (forfeited). Of the forfeited shares, 800 were reissued to Supriya at ₹9 fully paid (including all of Mohit’s shares). Pass journal entries.

Prince Ltd – Journal Entries

Particulars	Debit (₹)	Credit (₹)	Remarks
Bank A/c To Share Application A/c	60,000	60,000	Application money received (30,000 × ₹2)
Share Application A/c To Share Capital A/c To Bank A/c	40,000 20,000	40,000 20,000	Application money transferred for allotted (20,000 × ₹2), refund (10,000 × ₹2)
Bank A/c To Share Allotment A/c	1,00,000	1,00,000	Allotment money received (20,000 × ₹5 incl. ₹3 premium)
Bank A/c To Share First Call A/c	60,000	60,000	First call money received (20,000 × ₹3)
Bank A/c To Share Final Call A/c	60,000	60,000	Final call money received (20,000 × ₹3)
Share Capital A/c Securities Premium A/c To Calls in Arrears A/c To Share Forfeiture A/c	4,800 2,400	6,000 1,200	Forfeiture of 1,000 shares (Mohit and Joly)
Bank A/c Share Forfeiture A/c To Share Capital A/c	7,200 1,800	9,000	Reissue of 800 forfeited shares at ₹9 fully paid
Share Forfeiture A/c To Capital Reserve A/c	600	600	Transfer of balance to Capital Reserve

Q27: (Rights/Bonus style) Share Capital changes via bonus/rights: The XYZ Co had ₹2,00,000 equity issued (20,000 shares of ₹10, fully paid). It issued 5,000 bonus shares by capitalising reserves. Show the journal entry and updated Share Capital in the BS.

XYZ Co – Bonus Shares Journal Entry

Date	Particulars	Debit (₹)	Credit (₹)	Remarks
	Profit & Loss Appropriation A/c / General Reserve A/c To Share Capital A/c	50,000	50,000	Issue of 5,000 bonus shares (₹10 each) by capitalizing reserves

Updated Share Capital (in Balance Sheet)

Particulars	Amount (₹)
Equity Share Capital:
Existing (20,000 × ₹10)	2,00,000
Bonus Issue (5,000 × ₹10)	50,000
Total	2,50,000

Q28: (Final Call/Forfeiture) Ram holds 100 shares of ₹10 (Rs. 8 called); he paid ₹6. It was forfeited. What is the amount credited to Share Forfeiture on forfeiture? Calculate by journal (Ram’s share account and share forfeiture).

Ram’s Share Forfeiture Calculation & Journal Entry

Date	Particulars	Debit (₹)	Credit (₹)	Remarks
	Share Capital A/c To Share Forfeiture A/c To Calls in Arrears A/c	800	600 200	Forfeiture of 100 shares (₹8 called up; ₹6 paid; ₹2 unpaid)

Ram holds 100 shares, each called up ₹8 but paid ₹6.
Total called-up amount = 100 × 8 = ₹800 (debited to Share Capital).
Amount received = 100 × 6 = ₹600 (credited to Share Forfeiture).
Unpaid amount = 100 × 2 = ₹200 (credited to Calls In Arrears).

Q29: (Shares for consideration) Meera Traders is acquired by issuing shares: Assets ₹1,50,000, Liab ₹30,000, consideration ₹1,20,000. Balance paid by issuing 12% pref shares of ₹100 @ 15% premium. Pass J/E.

Date	Particulars	Debit (₹)	Credit (₹)	Remarks
	Assets A/c To Liabilities A/c To Vendor’s Account	1,50,000	30,000 1,20,000	Assets and liabilities taken over
	Vendor’s Account To 12% Preference Share Capital A/c To Securities Premium A/c To Bank A/c	1,20,000	1,00,000 15,000 5,000	Settlement by issuing shares and payment by draft

Assets acquired = ₹1,50,000
Liabilities assumed = ₹30,000
Net consideration to vendor = ₹1,50,000 - ₹30,000 = ₹1,20,000
Preference shares issued = 1,000 shares × ₹100 face value
Issue price per share = ₹100 + 15% premium = ₹115
Value of shares issued = 1,000 × ₹115 = ₹1,15,000
Cash paid by draft = ₹5,000
Total consideration = Shares issued + Cash = ₹1,15,000 + ₹5,000 = ₹1,20,000

Q30: (Warrants/Call in advance) Lena Ltd issued 1,000 shares @ ₹10, payable 2,3,2. Dev applied for 100 but paid ₹6 in advance on allotment (before due). On allotment, cash received ₹... journalize (treat as call in advance).

Date	Particulars	Debit (₹)	Credit (₹)	Remarks
	Bank A/c To Calls in Advance A/c	600	600	Dev paid ₹6 in advance on allotment (100 shares)
	Bank A/c Calls in Advance A/c To Share Allotment A/c	200 600	800	Remaining allotment money received; advance adjusted

Shares applied = 100 shares
Share value = ₹10 per share
Amount paid in advance = ₹6 per share → $100 \times 6 = 600$ 100×6=₹600
Remaining allotment due = ₹4 per share → $100 \times 4 = 400$ 100×4=₹400
On allotment due, ₹2 received, ₹2 adjusted from calls in advance
Total allotment = ₹8 per share → $100 \times 8 = 800$ 100×8=₹800

Long Questions (Q31–Q35)

Q31: CCL Ltd invited applications for 75,000 equity shares of ₹10 each at a premium of ₹3 per share.
Payable: ₹2 on application, ₹6 (including premium) on allotment, ₹3 on first call, balance on second & final call.
Applications for 1,20,000 shares were received. Out of these, 45,000 applications were rejected, and excess application money was refunded. Full allotment was made to the remaining applicants. All money was received except for Harish, who held 2,000 shares and failed to pay the first call and final call.
Required: Pass journal entries.

CCL Ltd – Journal Entries

Particulars	Debit (₹)	Credit (₹)	Remarks
Bank A/c To Share Application A/c	2,40,000	2,40,000	Application money received (1,20,000 × ₹2)
Share Application A/c To Share Capital A/c To Bank A/c	1,50,000 90,000	1,50,000 90,000	Application money transferred for allotted shares
Bank A/c To Share Allotment A/c	7,20,000	7,20,000	Allotment money received (1,20,000 × ₹6)
Bank A/c	3,00,000		First call money received
Calls in Arrears A/c	60,000		Calls not received from Harish
To Share First_and Final Call A/c		3,60,000
Share Application A/c Share Allotment A/c Share First and Final Call A/c To Share Capital A/c	1,50,000 7,20,000 3,60,000	12,30,000	Transfer money to share capital

Working Notes:

Application money = 1,20,000 shares × ₹2 = ₹2,40,000
Allotment money = 1,20,000 shares × ₹6 = ₹7,20,000
First and Final call = (3 × 1,20,000) = ₹3,60,000
Calls in arrears = ₹60,000 (Harish did not pay calls on 30,000 shares × ₹2)
Total called-up capital = ₹12,30,000

Q32: (Continuation of Prince Ltd case – same as Q26)
Prince Ltd invited 20,000 shares of ₹10 each at a ₹3 premium. Applications for 30,000 shares were received and allotted prorata. Mohit (400 shares) failed to pay the allotment & first call. Joly (600 shares) failed to pay the first & second calls. Both sets of shares were forfeited, and 800 shares (including all of Mohit’s) were reissued to Supriya at ₹9 fully paid.
Required: Prepare Share Capital Schedule, show Share Forfeiture and Capital Reserve.

Prince Ltd – Share Capital and Capital Reserve

Particulars	Debit (₹)	Credit (₹)	Remarks
Share Capital A/c To Calls in Arrears A/c	2,10,000	2,10,000	Calls unpaid by shareholders
Share Capital A/c To Share Forfeiture A/c	8,400	8,400	Forfeiture of shares
Bank A/c Share Forfeiture A/c To Share Capital A/c	1,800 6,600	8,400	Reissue of forfeited shares
Share Forfeiture A/c To Capital Reserve A/c	600	600	Transfer remaining forfeiture to Capital Reserve

Working Notes:

Calls in Arrears:
Shareholders unpaid calls = ₹2,10,000
Forfeited Amount:
Total calls unpaid on forfeited shares = ₹8,400
Reissue of Shares:
Forfeited shares reissued at ₹8,400 (₹1,800 + ₹6,600)
Capital Reserve:
Balance of forfeiture transferred to capital reserve = ₹600
Share Capital:
Share capital reduced by ₹8,400 (forfeited shares adjustment)

Q33: Himalaya Co. Ltd offered 1,20,000 shares of ₹10 each at ₹2 premium.
Payable: ₹3 on application, ₹5 (including premium) on allotment, ₹2 on first call.
Applications for 1,50,000 shares were received. 1,20,000 were allotted and 30,000 rejected. All money was received except the second call on 1,000 shares. These shares were forfeited, and later 600 shares were reissued at ₹9.
Required: Pass journal entries and prepare Balance Sheet (Share Capital, Forfeiture, Capital Reserve).

Himalaya Co. Ltd – Journal Entries

Particulars	Debit (₹)	Credit (₹)	Remarks
Bank A/c To Share Application A/c	4,50,000	4,50,000	Application money received (1,50,000 × ₹3)
Share Application A/c To Share Capital A/c To Bank A/c	3,60,000 90,000	3,60,000 90,000	Application money for 1,20,000 allotted shares; refund ₹90,000
Bank A/c To Share Allotment A/c	6,00,000	6,00,000	Allotment money received (1,20,000 × ₹5, including ₹2 premium)
Bank A/c Calls in Arrears A/c To Share First Call A/c	2,38,000 2,000	2,40,000	Call money received except on 1,000 shares
Share Capital A/c Securities Premium A/c To Calls in Arrears A/c To Share Forfeiture A/c	10,000 2,000	2,000 10,000	Forfeiture of 1,000 shares (calls unpaid ₹2 per share)
Bank A/c Share Forfeiture A/c To Share Capital A/c	5,400 3,000	8,400	Reissue of 600 shares at ₹9
Share Forfeiture A/c To Capital Reserve A/c	2,400	2,400	Transfer remaining forfeiture to Capital Reserve

Working Notes:

Application Money Received:
Shares applied: 150,000 shares
Application money per share: ₹3
Total application money: $150, 000 \times 3 = 4, 50, 000$ 150,000×3=₹4,50,000

Application Money Transferred/Refunded:
Shares allotted: 120,000 shares
Application money adjusted: 120,000×3=₹3,60,000
Refund on excess application: $30, 000 \times 3 = 90, 000$ 30,000×3=₹90,000

Allotment Received:
- $120, 000 \times 5 = 6, 00, 000$ 120,000×₹5=₹6,00,000
Calls Received:
- Total payable calls: $120, 000 \times 3 = 3, 60, 000$ 120,000×₹3=₹3,60,000
- Calls paid by shareholders: ₹3,45,000 (₹1,95,000 + ₹1,50,000)
- Calls in arrears (unpaid): $5, 000 \times 3 = 15, 000$ 5,000×₹3=₹15,000
Forfeiture:
- Number shares forfeited: 5,000 shares
- Calls and premium unpaid: ₹45,000 + ₹15,000 = ₹60,000
- Forfeiture proceeds recorded: ₹50,000 (share capital) + ₹10,000 (premium)
Reissue of Forfeited Shares:
- Shares reissued: 2,000 shares
- Reissue price: ₹13 per share
- Securities premium credited: ₹6,000
Capital Reserve:
- Transfer remaining forfeiture proceeds to capital reserve: ₹6,000

Q34: Ajanta Co. Ltd (Nominal capital ₹3,00,000) offered 20,000 shares of ₹10 each payable as follows: ₹2 on application, ₹3 on allotment, 2 calls of ₹2.50 each.
Applications for 24,000 shares were received. 20,000 accepted and 4,000 refunded. Final call on 600 shares remained unpaid, and those shares were forfeited. Out of these, 400 shares were reissued at ₹9 each.
Required: Pass journal entries and prepare Balance Sheet (Share Capital and Share Forfeiture).

Journal Entries for Ajanta Co. Ltd

Date	Particulars	Debit (₹)	Credit (₹)
1.	On Application Money Received
	Bank A/c Dr.	48,000
	To Share Application A/c		48,000
	(Being application money received for 24,000 shares @ ₹2 each)
2.	On Transfer of Application Money
	Share Application A/c Dr.	40,000
	To Share Capital A/c		40,000
	(Being application money transferred for 20,000 shares @ ₹2 each)
3.	On Refund of Excess Application Money
	Share Application A/c Dr.	8,000
	To Bank A/c		8,000
	(Being excess application money refunded for 4,000 shares @ ₹2 each)
4.	On Allotment Money Due
	Share Allotment A/c Dr.	60,000
	To Share Capital A/c		60,000
	(Being allotment money due on 20,000 shares @ ₹3 each)
5.	On Allotment Money Received
	Bank A/c Dr.	60,000
	To Share Allotment A/c		60,000
	(Being allotment money received)
6.	On First Call Money Due
	Share First Call A/c Dr.	50,000
	To Share Capital A/c		50,000
	(Being first call money due on 20,000 shares @ ₹2.50 each)
7.	On First Call Money Received
	Bank A/c Dr.	50,000
	To Share First Call A/c		50,000
	(Being first call money received)
8.	On Final Call Money Due
	Share Final Call A/c Dr.	50,000
	To Share Capital A/c		50,000
	(Being final call money due on 20,000 shares @ ₹2.50 each)
9.	On Final Call Money Received
	Bank A/c Dr.	48,500
	To Share Final Call A/c		48,500
	(Being final call money received except for 600 shares @ ₹2.50 each)
10.	On Forfeiture of Shares
	Share Capital A/c Dr.	6,000
	To Share Final Call A/c		1,500
	To Share Forfeiture A/c		4,500
	(Being 600 shares forfeited, nominal value ₹10 each, final call unpaid ₹2.50 each)
11.	On Reissue of Forfeited Shares
	Bank A/c Dr.	3,600
	Share Forfeiture A/c Dr.	400
	To Share Capital A/c		4,000
	(Being 400 forfeited shares reissued @ ₹9 each, nominal value ₹10 each)
12.	On Transfer of Surplus to Capital Reserve
	Share Forfeiture A/c Dr.	400
	To Capital Reserve A/c		400
	(Being surplus on reissue of 400 shares transferred to Capital Reserve)

Balance Sheet of Ajanta Co. Ltd (Extract)

Particulars	Amount (₹)
Share Capital
Authorised Capital:
30,000 Equity Shares of ₹10 each	3,00,000
Issued and Subscribed Capital:
20,000 Equity Shares of ₹10 each	2,00,000
Subscribed and Fully Paid-up Capital:
19,800 Equity Shares of ₹10 each fully paid	1,98,000
Reserves and Surplus
Capital Reserve	2,600
Share Forfeiture Account	1,500

Notes:

600 shares were forfeited due to non-payment of the final call of ₹2.50 each.
400 forfeited shares were reissued at ₹9 each, resulting in a discount of ₹400.
Amount forfeited on 400 shares: (400/600) × ₹4,500 = ₹3,000; after adjusting ₹400 discount, ₹2,600 transferred to Capital Reserve.
Share Forfeiture Account balance: (200/600) × ₹4,500 = ₹1,500 for 200 shares not reissued.

Q35: Three shareholders failed to pay the second call on their shares:
Amit: 100 shares of ₹10 each (paid only ₹1 application fee)
Bimal: 200 shares of ₹10 each (paid ₹1 application + ₹2 allotment)
Chetan: 300 shares of ₹10 each (paid ₹1 application + ₹2 allotment + ₹3 first call)
The second call of ₹2 was not paid, so all their shares were forfeited. Later, 600 shares were reissued to Kapil at ₹11 fully paid.
Required: Pass journal entries (Share Capital, Calls in Arrears, Share Forfeiture, Reissue).

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FAQs on Worksheet Solutions: Accounting for Share Capital - Accountancy Class 12 - Commerce

1. What is share capital in accounting?

Ans. Share capital refers to the funds that a company raises by issuing shares to investors. This capital represents ownership in the company and can be classified into different types, such as authorized capital (the maximum amount of share capital a company is allowed to issue), issued capital (the portion of authorized capital that has been issued to shareholders), and paid-up capital (the amount that shareholders have actually paid for their shares).

2. How is share capital accounted for in financial statements?

Ans. Share capital is recorded in the equity section of the balance sheet. It is typically displayed at par value, which is the nominal value of the shares issued. Any amount received over the par value is recorded as share premium. This accounting ensures that the total equity of the company reflects the contributions made by its shareholders.

3. What are the different types of shares that can be issued as part of share capital?

Ans. Companies can issue various types of shares, including ordinary shares (which carry voting rights and dividends based on company profits) and preference shares (which typically have a fixed dividend and priority over ordinary shares in asset distribution upon liquidation). Additionally, shares can be classified as fully paid shares (where the shareholder has paid the full amount) and partly paid shares (where the shareholder has only paid a portion of the total share value).

4. What is the difference between authorized capital and paid-up capital?

Ans. Authorized capital is the maximum amount of share capital that a company is permitted to issue as specified in its memorandum of association. Paid-up capital, on the other hand, is the actual amount that has been received from shareholders for the shares issued. In other words, authorized capital defines the limit, while paid-up capital reflects the actual funds raised.

5. Why is maintaining a proper accounting for share capital important for companies?

Ans. Proper accounting for share capital is crucial as it provides transparency and accurate financial information to stakeholders, including investors, creditors, and regulatory bodies. It helps in assessing the financial health of the company, facilitates compliance with legal requirements, and aids in making informed decisions regarding future financing and investments.

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