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NCERT · Class 12 · Accountancy

Unit 1: Accounting for Share Capital

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Numerical Questions for NCERT Accountancy Solutions Part 2 Class 12 Chapter 1

24 questions
Q21Written answer

Amit holds 100 shares of ₹ 10 each on which he has paid Re.1 per share as application money. Bimal holds 200 shares of ₹ 10 each on which he has paid Re.1 and ₹ 2 per share as application and allotment money, respectively. Chetan holds 300 shares of ₹ 10 each and has paid Re.1 on application, ₹ 2 on allotment and ₹ 3 for the first call. They all fail to pay their arrears and the second call of ₹ 2 per share and the directors, therefore, forfeited their shares. The shares are reissued subsequently for ₹ 11 per share as fully paid. Journalise the transactions.

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Worked solution
Date Particulars L.F. Debit

Amount

₹

 Credit

Amount

₹
Share Capital A/c (600×8) Dr. 4,800
To Share Allotment (100×2) 200
To Share First Call A/c (300×3) 900
To Share Second Call A/c (600×2) 1,200
To Share Forfeiture A/c 2,500
(600 shares @ ₹ 10 per share ₹ 8 called-up forfeited after

making Second Call)
Bank A/c Dr. 6,600
To Share Capital A/c 6,000
To Securities Premium A/c 600
(600 shares @ ₹ 10 each for ₹ 11 per share fully paid-up

reissued)
Share Forfeiture A/c Dr. 2,500
To Capital Reserve A/c 2,500
(Balance of Share Forfeiture Account transferred to Capital

Reserve Account after reissue)

Working Notes:

Share Forfeiture Account credited
Amit (100×1) = 100
Bimal (200×3) = 600
Chetan (300×6) = 1,800
2,500
Q22Written answer

Ajanta Company Limited having a normal capital of ₹ 3,00,000, divided into shares of ₹ 10 each offered for public subscription of 20,000 shares payable at ₹ 2 on application; ₹ 3 on allotment and the balance in two calls of ₹ 2.50 each. Applications were received by the company for 24,000 shares. Applications for 20,000 shares were accepted in full and the shares allotted. Applications for the remaining shares were rejected and the application money was refunded.

All moneys due were received with the exception of the final call on 600 shares which were forfeited after legal formalities were fulfilled. 400 shares of the forfeited shares were reissued at ₹ 9 per share.

Record necessary journal entries and prepare the balance Sheet showing the amount transferred to capital reserve and the balance in Share forfeiture account.

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Worked solution
Books of Ajanta Company Limited
Date Particulars L.F. Debit

Amount

₹

 Credit

Amount

₹
Bank A/c Dr. 48,000
To Share Application A/c 48,000
(Share Application money received for  24,000 shares @ ₹ 2 per share)
Share Application A/c Dr. 48,000
To Share Capital A/c 40,000
To Bank A/c 8,000
(Share Application @ ₹ 2 per share for 20,000 shares  transferred to Share Capital and remaining for 4,000 shares rejected)
Share Allotment A/c Dr. 60,000
To Share Capital A/c 60,000
(Share Allotment money due @ ₹ 3 per share on 20,000 shares )
Bank A/c Dr. 60,000
To Share Allotment A/c 60,000
(Share Allotment money received for 20,000 shares  @ ₹ 3

per share)
Share First Call A/c Dr. 50,000
To  Share Capital A/c 50,000
(Share First Call money due on 20,000 Shares @ ₹ 2.5 per share)
Bank A/c Dr. 50,000
To Share First Call A/c 50,000
(Share First Call money received for 20,000 shares @ ₹ 2.5 per share)
Share Final Call A/c Dr.
To Share Capital A/c
(Share Final Call money due on 20,000 Shares @ ₹ 2.5 per share)
Bank A/c Dr. 48,500
Calls in Arrears A/c Dr. 1,500
To Share Final Call A/c 50,000
(Share Final Call money received for 19,400 shares @ ₹ 2.5 per share except 600 shares)
Share Capital A/c Dr. 6,000
To Calls in Arrears A/c 1,500
To Share Forfeiture A/c 4,500
(600 Shares forfeited @ ₹ 10 each for the non-payment of Share

Final Call @  ₹ 2.5 per share)
Bank A/c Dr. 3,600
Share Forfeiture A/c Dr. 400
To Share Capital A/c 4,000
(400 shares @ ₹ 10 each for ₹ 9 per share reissued)
Share Forfeiture Account Dr. 2,600
To Capital Reserve A/c 2,600
(After reissue balance of 400 shares in Forfeiture Account transferred to Capital Reserve Account)
Ajanta Company Limited
Balance Sheet
Particulars Note No. Amount

(₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital 1 1,99,500
    b. Reserves and Surplus 2 2,600
2. Non-Current Liabilities
3. Current Liabilities
Total 2,02,100
II. Assets
1.Non-Current Assets
2.Current Assets
a. Cash and Cash Equivalents 3 2,02,100
Total 2,02,100

NOTES TO ACCOUNTS

Note No. Particulars Amount

(₹)
1 Share Capital
Authorised Share Capital
30,000 shares of ₹ 10 each 3,00,000
Issued Share Capital
20,000 shares of ₹ 10 each 2,00,000
Subscribed, Called-up and Paid-up Share Capital
19,800 shares of ₹ 10 each 1,98,000
Add: Shares Forfeiture 1,500 1,99,500
2 Reserves and Surplus
Capital Reserve 2,600
3 Cash and Cash Equivalents
Cash at Bank 2,02,100

Working Note:

Share Forfeiture Account credited ₹ 7.5 per share
Less: Share Forfeiture Account debited ₹1 per share
Amount  transferred to Capital Reserve Account, after adjustment ₹ 6.5 per share

Amount of 400 shares transferred to Capital Reserve Account, after reissue = 400 Shares @ ₹ 6.5 per share = ₹ 2,600

Q23Written answer

Journalise the following transactions in the books Bhushan Oil Ltd.:

(a) 200 shares of ₹. 100 each issued at a premium of ₹. 10 were forfeited for the non-payment of allotment money of ₹. 60 per share. The first and final call of ₹. 20 per share on these shares were not made. The forfeited shares were reissued at ₹. 70 per share as fully paid-up.

(b) 150 shares of ₹. 10 each issued at a premium of ₹. 4 per share payable with allotment were forfeited for non-payment of allotment money of ₹. 8 per share including premium. The first and final calls of ₹. 4 per share were not made. The forfeited shares were reissued at ₹. 15 per share fully paid-up.

(c) 400 shares of ₹. 50 each issued at par were forfeited for non-payment of final call of ₹. 10 per share. These shares were reissued at ₹. 45 per share fully paid-up.

Case (a)

Books of Bhushan Oil Ltd.
Date Particulars L.F. Debit

Amount

(₹)

 Credit

Amount

(₹)
Share Capital A/c (200 × 80) Dr. 16,000
Securities Premium A/c (200 × 10) Dr. 2,000
To Share Allotment A/c (200 × 60) 12,000
To Share Forfeiture A/c (200 × 30) 6,000
(200 shares forfeited @ ₹100 each  issued at a premium of

₹10 for the nonpayment of allotment money  ₹60 per share)
Bank A/c (200 × 70) Dr. 14,000
Share Forfeiture A/c (200 × 30) Dr. 6,000
To Share Capital A/c (200 × 100) 20,000
(200 shares reissued @ ₹70 per share fully paid-up)

Case (b)

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Worked solution
Date Particulars L.F. Debit

Amount

(₹)

 Credit

Amount

(₹)
Share Capital A/c Dr. 900
Securities Premium A/c Dr. 600
To Share Allotment A/c 1,200
To  Share Forfeiture A/c 300
(150 shares @ ₹10 each forfeited for nonpayment of allotment

money ₹ 8 per share including premium ₹4)
Bank A/c Dr. 2,250
To Share Capital A/c 1,500
To Securities Premium A/c 750
(150 shares @ ₹10 each reissued For  ₹15 per share fully

paid-up)
Share Forfeiture A/c Dr. 300
To Capital Reserve A/c 300
(Balance of Share Forfeiture Account transferred to Capital

Reserve Account)

Case (c)

Date Particulars L.F. Debit

Amount

(₹)

 Credit

Amount

(₹)
Share Capital A/c Dr. 20,000
To Share Final Call A/c 4,000
To Share Forfeiture A/c 16,000
(400 shares @ ₹ 50 per share forfeited for nonpayment of Final

Call ₹ 10 per share)
Bank A/c Dr. 18,000
Share forfeiture A/c Dr. 2,000
To Share Capital A/c 20,000
(400 shares @ ₹50 each reissued for  ₹45 fully paid-up)
Share Forfeiture A/c Dr. 14,000
To Capital Reserve A/c 14,000
(Balance in Share Forfeiture Account  transferred to Capital

Reserve Account)
Q24Written answer

Amisha Ltd inviting application for 40,000 shares of ₹ 100 each at a premium of ₹ 20 per share payable; on application ₹ 40 ; on allotment ₹ 40 (Including premium): on first call ₹ 25 and Second and final call ₹ 15.

Application were received for 50,000 shares and allotment was made on pro-rata basis. Excess money on application was adjusted on sums due on allotment.

Rohit to whom 600 shares were allotted failed to pay the allotment money and his shares were forfeited after allotment. Ashmita, who applied for 1,000 shares failed to pay the

Two calls and his shares were forfeited after the second call. Of the shares forfeited, 1,200 shares were sold to Kapil for ₹ 85 per share as fully paid, the whole of Rohit’s shares being included.

Record necessary journal entries.

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Worked solution
Books of Amisha Ltd.
Date Particulars L.F. Debit

Amount

₹

 Credit

Amount

₹
Bank A/c Dr. 20,00,000
To Share Application A/c 20,00,000
(Share Application money received on 50,000 shares @ 40 per share)
Share Application A/c Dr. 20,00,000
To Share Capital A/c 16,00,000
To Share Allotment A/c 4,00,000
(Share Application money adjusted)
Share Allotment A/c Dr. 16,00,000
To Share Capital A/c 8,00,000
To Share Premium A/c 8,00,000
(Share Allotment money due including premium)
Bank A/c Dr. 11,82,000
To Share Allotment A/c 11,82,000
(Share Allotment money received except 600 shares)
Share Capital A/c Dr. 36,000
Share premium A/c Dr. 12,000
To Share Allotment A/c 18,000
To Share Forfeiture A/c 30,000
(600 shares forfeited after allotment)
Share First Call A/c Dr. 9,85,000
To Share Capital 9,85,000
(First Call money in due on 39,400 shares)
Bank A/c Dr. 9,65,000
To Share First Call A/c 9,65,000
(First Call money received except 800 shares)
Share Second and Final Call A/c Dr. 5,91,000
To Share Capital A/c 5,91,000
(Second and Final Call money due on 39,400 shares)
Bank A/c Dr. 5,79,000
To Share Second and Final Call A/c 5,79,000
(Second and Final Call money received except 800 shares)
Share Capital A/c Dr. 80,000
To Share First Call A/c 20,000
To Share Second & Final Call A/c 12,000
To Share Forfeiture A/c 48,000
(800 share forfeited)
Bank A/c Dr. 1,02,000
Share Forfeiture A/c Dr. 18,000
To Share Capital A/c 1,20,000
(Forfeited shares reissued 1,200 @ 85 per share)
Share Forfeiture A/c Dr. 48,000
To Capital Reserve A/c 48,000
(Profit on 1,200 reissued shares are transfer to capital reserve

account)
Cash Book (Bank Column)
Dr. Cr.
Date Particulars J.F. Amount

₹

 Date Particulars J.F. Amount

₹
Share Application 20,00,000 Balance c/d 48,28,000
Share Allotment 11,82,000
Share First Call 9,65,000
Share Final Call 5,79,000
Share Capital 1,02,000
48,28,000 48,28,000

Working Notes:

21

2. Call in arrears by Rohit on allotment

Money received on Application (750×40) = 30,000
Less: Amount adjusted on Application (600×40) = 24,000
Amount adjusted on Allotment 6,000

3

Money due on Allotment (600×40) 24,000
Money adjusted 6,000
Balance due on Allotment 18,000

22

5. Profit on the forfeiture of 600 share of Rohit = ₹ 30,000

Profit on the forfeiture of 600 share of Ashmita = ₹ 36,000
23

Profit on forfeiture of 1200 shares (30,000 + 36,000) = 66,000
Less: Loss on reissue of shares = 18,000
Transfer to Capital Reserve = 48,000

6. Balance in Share Forfeiture Account (48,000 – 36,000) = ₹ 12,000

Concepts covered in this chapter –

  • Features of a company
  • Types of companies
  • Share capital of a company
  • Nature and classes of shares
  • Issue of shares
  • Accounting treatment
  • Forfeiture of the shares
Conclusion