CBSE XII COMPILED BY SUDHIR SINHA

ACCOUNTANCY ACCOUNTING FOR SHARE CAPITAL

ACCOUNTING FOR SHARE CAPITAL – CBSE QUESTION BANK

1 Pass necessary journal entries for the forfeiture and reissue of shares in the following
cases:
(i) BCG Limited forfeited 75 shares of ₹10 each issued at a premium of ₹4 per share for
non-payment of allotment money of ₹8 per share (including premium). The first and final
call of ₹4 per share was not made. The forfeited
shares were reissued at ₹15 per share fully paid.
(ii) Geetika Limited forfeited 1,200 shares of ₹50 each issued at par for non-payment of
final call of ₹10 per share. Out of these, 900 shares were reissued at ₹45 per share fully
paid-up. CBSE (Main Exam 2023)

2 Pushkar Limited invited applications for 30,000 shares of ₹100 each at 20% premium.
The amount per share was payable as under:
On application ₹40 (including ₹10 premium)
On allotment ₹30 (including ₹10 premium)
On first call ₹30
On second and final call Balance
Applications were received for 40,000 shares and pro-rata allotment was made to the
applicants for 35,000 shares, the remaining applications being refused.
Excess application money was adjusted towards sums due on allotment.
Yogesh, who applied for 700 shares, failed to pay the allotment money and his shares
were forfeited immediately after allotment. First call was made thereafter and all the
money due on first call was received. The second and final call was not made.
Pass necessary journal entries for the above transactions in the books of Pushkar
Limited. CBSE (Main Exam 2023)

3 Pass necessary journal entries for the forfeiture and reissue of shares in the following
cases:
(i) CC Ltd. forfeited 10,000 shares of ₹10 each, ₹8 called up, for non-payment of allotment
money of ₹3 per share and first call of ₹3 per share. Out of these, 2000 shares were
reissued for ₹7 per share, ₹8 paid up.
(ii) GG Ltd. forfeited 2000 shares of ₹10 each fully called up, issued at a premium of 10%
on which only application money of ₹3 per share was received. Out of these, 500 shares
were re-issued at ₹11 per share, fully paid up. CBSE (Comptt Exam 2023)

4 CCL Ltd. invited applications for issuing 75,000 equity shares of ₹10 each at a premium
of ₹3 per share.
The amount was payable as follows:
On Application ₹2 per share On Allotment ₹6 per share (including premium)
On First Call ₹3 per share On Second and Final Call Balance
Applications for 1,20,000 shares were received. Application for 45,000 shares were
rejected and the excess application money was refunded. Full allotment was made to
remaining applicants. All moneys due were received except for Harish, a shareholder
holding 2000 shares, who failed to pay the first and second and final call money.
Pass necessary journal entries for the above transactions in the books of the company.
CBSE (Comptt Exam 2023)

5 Anurag Ltd. invited applications for issuing 1,00,000 equity shares of ₹10 each at a
premium of 10%. The amount was payable as follows:
On application - ₹3 per share
On allotment - ₹ 3 per share (including premium)
On first call - ₹2 per share
On second and final call - Balance
 CBSE XII COMPILED BY SUDHIR SINHA
ACCOUNTANCY ACCOUNTING FOR SHARE CAPITAL

All the shares were subscribed and allotted. Gopal, holding 600 shares, failed to pay the
first call and the second and final call. Pass the necessary journal entries for the above
transactions in the books of Anurag Ltd. Open Calls-in-Arrears Account, wherever
necessary. (C.B.S.E. 2021 Comptt 2021)

6 Pass journal entries for the following transactions:

(i) AXN Ltd. forfeited 2,400 shares of ₹10 each for non-payment of final call of ₹3 per
share. Out of the forfeited shares, 800 shares were reissued at ₹8 per share as fully paid
up.
(ii) Vanya Ltd. purchased a running business from Hardik Ltd. for sum of ₹18,00,000.
The payment of ₹10,00,000 was made by issue of equity shares of ₹10 each and balance
by a cheque. The assets and liabilities acquired from Hardik Ltd. consisted the following:
₹
Machinery 9,00,000
Land and building 13,50,000
Furniture 8,50,000
Sundry Creditors 3,00,000 (C.B.S.E. 2021 Comptt 2021)

7 Raunit Styles Ltd. was registered with a capital of ₹85,00,000 divided into equity shares
of ₹100 each. The company invited applications for issuing 45,000 shares.
The amount was payable as ₹25 on application, ₹35 on allotment, ₹25 on first call and
balance on final call.
Applications were received for 42,000 shares and allotment was made to all the
applicants. Kavi, to whom 3,300 shares were allotted, failed to pay both the calls. His
shares were forfeited.
Present the Share Capital in the Balance Sheet of the company as per Schedule III of the
Companies Act, 2013. (C.B.S.E. MAINS 2020, 4 MARKS)

8 R.P. Ltd. forfeited 1,500 shares of Rahim of < 10 each issued at a premium of ₹3 per
share for non-payment of allotment and first call money. Rahim had applied for 3,000
shares. On these shares, amount was payable as follows:
On application – ₹3 per share
On allotment (including premium) – ₹5 per share
On first call – ₹3 per share
On final call – Balance
Final call has not been called up. 1,000 of the forfeited shares were reissued for ₹8,500
as fully paid-up.
Record the necessary journal entries for the above transactions in the books of R.P. Ltd.
(C.B.S.E. MAINS 2020, 4 MARKS)

9 Max Ltd. forfeited 500 shares of ₹100 each for non-payment of first call of ₹20 per share
and final call of ₹25 per share. 250 of these shares were re-issued at ₹50 per share fully
paid-up. Pass the necessary journal entries in the books of Max Ltd. for forfeiture and
re-issue of shares. Also prepare the Share Forfeiture Account.
(C.B.S.E. MAINS 2020, 4 MARKS)

10 Karur Ltd. invited applications for issuing 2,40,000 equity shares of ₹10 each at a
premium of ₹4 per share. The amount was payable as under:
On application – ₹4 per share (including premium ₹2)
On allotment – ₹4 per share
On first and final call – ₹6 per share (including premium ₹2)
Applications for 3,00,000 shares were received and pro-rata allotment was made to all
the applicants. Excess application money received on application was adjusted towards
sums due on allotment. All calls were made and were duly received except from Rohini,
 CBSE XII COMPILED BY SUDHIR SINHA
ACCOUNTANCY ACCOUNTING FOR SHARE CAPITAL

who failed to pay allotment and first and final call on 7,500 shares applied by her. These
shares were forfeited. Afterwards, 40% of the forfeited shares were re-issued at ₹11 per
share as fully paid-up.
Pass the necessary journal entries in the books of Karur Ltd. Open call-in-arrears and
call-in-advance accounts wherever necessary. (C.B.S.E. MAINS 2020, 8 MARKS)

11 Alpha India Ltd. was registered with an authorised capital of ₹10,00,000 divided into
1,00,000 equity shares of ₹10 each. The company offered to the public for subscription
80,000 equity shares payable per share as: ₹3 on application, ₹2 on allotment, ₹3 on
first call and the balance on second and final call. The issue was fully subscribed and
all amounts due were received except the first and final
call money on 2,000 shares allotted to Chavi. Her shares were forfeited.
Present the ‘Share Capital’ in the Balance Sheet of the company as per Schedule III, Part
I of the Companies Act, 2013. Also prepare ‘Notes to Accounts’.
(C.B.S.E. COMPTT. 2020, 4 MARKS)

12 A Ltd. invited applications for issuing 80,000 equity shares of ₹10 each at a premium of
₹4 per share. The amount was payable as follows:
On application – ₹5 per share
On allotment – ₹9 per share (premium included)
Applications were received for 1,40,000 shares and allotment was made to all applicants
on pro-rata basis. Money overpaid on applications was adjusted towards sum due on
allotment. Rajiv, who had applied for 1,400 shares failed to pay the allotment money.
His shares were forfeited.
Later on, these forfeited shares were reissued at ₹9 per share as fully paid up.
Pass the necessary journal entries in the books of A Ltd. for the above transactions.
(C.B.S.E. COMPTT. 2020, 8 MARKS)

13 AB Ltd. issued 30,000 shares of ₹10 each at par, payable as follows:

₹3 per share – on application
₹3 per share – on allotment
Balance – on first and final call
Applications were received for 50,000 shares. Applications for 10,000 shares were
rejected and allotment was made on pro-rata basis to the remaining applicants. Excess
money received on application was adjusted towards sums due on allotment. Natasha,
who had applied for 1,600 shares, failed to pay the amount due on allotment and call.
The company forfeited her shares. Later on, these forfeited shares were reissued at ₹10
per share as fully paid-up.
Pass the necessary journal entries in the books of AB Ltd. for the above transactions.
(C.B.S.E. COMPTT. 2020, 8 MARKS)
 CBSE XII COMPILED BY SUDHIR SINHA
ACCOUNTANCY ACCOUNTING FOR SHARE CAPITAL

14 DF Ltd. invited applications for issuing 50,000 shares of ₹10 each at a premium of ₹2
per share. The amount was payable as follows:
On Application: ₹3 per share (including premium ₹1)
On Allotment: ₹3 per share (including premium ₹1)
On First call: ₹3 per share
On Second and Final Call: Balance amount
Application for 70,000 shares were received. Allotment was made on the following basis.
Applications for 5,000 shares – Full
Applications for 50,000 shares – 90%
Balance of the applications were rejected. ₹1,11,000 were received on account of
allotment. The amount of allotment due from the shareholders to whom shares were
allotted on prorata basis was fully received. A few shareholders to whom shares were
allotted in full, failed to pay the allotment money. ₹1,20,000 were received on first call.
Directors decided to forfeit those shares on which allotment and call money was due.
Half of the forfeited shares were re-issued @ ₹8 per share fully paid up. Final call was
not made.
Pass the necessary journal entries for the above transactions in the book of DF Ltd.
(C.B.S.E. MAINS 2019, 8 MARKS)
15 EF Ltd. invited applications for issuing 80,000 equity shares of ₹50 each at a premium
of 20%. The amount was payable as follows:
On Application: ₹20 per share (including premium ₹5)
On Allotment: ₹15 per share (including premium ₹5)
On First Call: ₹15 per share
On Second and Final call: Balance amount
Applications for 1,20,000 shares were received. Applications for 20,000 shares were
rejected and pro-rata allotment was made to the remaining applicants.
Seema, holding 4,000 shares failed to pay the allotment money. Afterwards the first call
was made. Seema paid allotment money along with the first call. Sahaj who had applied
for 2,500 shares failed to pay the first call money. Sahaj’s shares were forfeited and
subsequently reissued to Geeta for ₹60 per share, ₹50 per share paid up. Final call was
not made.
Pass necessary journal entries for the above transactions in the books of EF Ltd. by
opening calls-in-arrears account. (C.B.S.E. MAINS 2019, 8 MARKS)

16 Rathee Ltd. invited applications for issuing 1,00,000 equity shares of ₹10 each. The
shares were issued at a premium of 60%. The amount was payable as follows:
On Application and Allotment – ₹6 per share (including premium ₹4)
On First and Final Call – Balance including premium
Applications for 1,90,000 shares were received. The allotment was made as follows:
Category A – Applications for 10,000 shares were rejected.
Category B – Applications for 1,00,000 shares were allotted 50,000 shares.
Category C – Applications for 80,000 shares were allotted 50,000 shares.
Excess money received on application and allotment was adjusted towards sums due on
first and final call.
Ali, who belonged to Category B, and had applied for 1,000 shares, paid the entire
amount of his share money with application.
Bali, who belonged to Category C, was allotted 1,000 shares, failed to pay the first and
final call money. His shares were forfeited and re-issued at ₹15 per share fully paid up.
Pass necessary journal entries for the above transactions in the books of Rathee Ltd.
(C.B.S.E. Comptt. 2019, 8 MARKS)

17 ‘Venus Ltd’ was registered with an authorised capital of ₹40,00,000 divided into 4,00,000
equity shares of ₹10 each. 70,000 of these shares were issued as fully paid to ‘M/s. Star
Ltd.’ for building purchased from them. 2,00,000 shares were issued to the public and
the amounts were payable as follows:
 CBSE XII COMPILED BY SUDHIR SINHA
ACCOUNTANCY ACCOUNTING FOR SHARE CAPITAL

On Application – ₹3 per share

On Allotment – ₹2 per share
On First Call – ₹2 per share
On Second and Final Call – ₹3 per share
The amounts received on these shares were as follows:
On 1,00,000 shares – Full amount called
On 60,000 shares – ₹7 per share
On 30,000 shares – ₹5 per share
On 10,000 shares – ₹3 per share
The directors forfeited 10,000 shares on which only ₹3 per share were received. These
shares were reissued at ₹12 per share fully paid. Pass necessary journal entries for the
above transactions in the books of ‘Venus Ltd’. (C.B.S.E. Comptt. 2019, 8 MARKS)

18 Atishyokti Ltd. company was registered with an authorized capital of ₹ 20,00,000 divided
into 2,00,000 Equity Shares of ₹10 each, payable ₹3 on application, ₹6 on allotment
(including ₹1 premium) and balance on call. The company offered 80,000 shares for
public subscription. All the money has been duly called and received except allotment
and call money on 5,000 shares held by Manish and call money on 4,000 shares held
by Alok. Manish’s shares were forfeited and out of these 3,000 shares were re-issued ₹9
per share as fully paid up. Show share capital in the books of the company. Also prepare
notes to accounts. [CBSE SAMPLE PAPER 2024, 4 MARKS]

19 The Directors of Rockstar Ltd. invited applications for 2,00,000 Shares of ₹10 each,
issued at 20% premium. Share was payable as ₹5 on application, ₹4 (including premium)
on allotment and balance on call. Public had applied for 3,20,000 shares out of which
applications for 20,000 shares were rejected and remaining were allotted on pro-rata
basis. Simba, an applicant of 15,000 shares failed to pay allotment and call money. His
shares were forfeited and out of these 6,000 shares were reissued at a discount of ₹2 per
share. Journalise [CBSE SAMPLE PAPER 2024, 6 MARKS]

20 Shaktimaan Ltd. invited applications for issuing 1,00,000 Shares of ₹10 each at a
premium of ₹2 per share. The amount was payable as ₹4 on application (including
premium); ₹5 on Allotment and balance on call. Applications were received shares for
1,80,000 of which Applications for 30,000 shares were rejected and remaining applicants
were allotted on pro-rata basis.
Manthan, holding 5,000 shares failed to pay call money and his shares were forfeited.
Out of these 2,000 shares were re-issued at premium of ₹3 per share. Prepare Cash Book
and pass necessary entries. [CBSE SAMPLE PAPER 2024, 6 MARKS]

21 Random Ltd. took over running business of Mature Ltd. comprising of Assets of
₹45,00,000 and Liabilities of ₹6,40,000 for a purchase consideration of ₹36,00,000. The
amount was settled by bank draft of ₹1,50,000 and balance by issuing 12% preference
shares of ₹100 each at 15% premium. Pass entries in the books of Random Ltd.
[CBSE SAMPLE PAPER 2023, 3 MARKS]

22 Altaur Ltd. was registered with an authorised Capital of ₹ 4,00,00,000 divided in

25,00,000 Equity Shares of ₹ 10 each and 1,50,000, 9% Preference Shares of ₹ 100 each.
The company issued 8,00,000 Equity Shares for public subscription at 20% premium,
payable ₹3 on application; ₹7 on allotment (including premium) and balance on call.
Public had applied for 10,00,000 shares. Excess Applications were sent letters of regret.
All the dues on allotment received except on 15,000 shares held by Sanju. Another
shareholder Rocky paid his call dues along with allotment on his holding of 25,000
shares. You are required to prepare the Balance Sheet of the company as per Schedule
 CBSE XII COMPILED BY SUDHIR SINHA
ACCOUNTANCY ACCOUNTING FOR SHARE CAPITAL

III of Companies Act, 2013, showing Share Capital balance and also prepare Notes to
Accounts. [CBSE SAMPLE PAPER 2023, 4 MARKS]

23 OTUA Ltd. was registered with an authorised capital of 2,00,000 equity shares of ₹ 100
each. The company offered 60,000 shares for public subscription at 25% premium. The
share was payable as ₹ 40 on application and balance on allotment, with premium.
Public had applied for 85,000 shares. Pro-rata allotment was made in the ratio of 5:4
and remaining applications were sent letters of regret. Mr. Anand holding 4,000 shares
failed to pay allotment money and his shares were forfeited. Out of these 3,000 shares
were re-issued at a discount of ₹20 per share. Pass necessary entries in the books of the
OTUA Ltd. [CBSE SAMPLE PAPER 2023, 6 MARKS]

24 Pass entries for forfeiture and re-issue in both the following cases.
(a) Vikram Ltd. forfeited 5,000 shares of Rahul, who had applied for 6,000 shares for
non-payment of allotment money of ₹ 5 per share and first and final call of ₹2 per share.
Only application money of ₹ 3 was paid by him. Out of these 3,000 shares were re-issued
@ ₹ 12 per share as fully paid.
(b) Ratan Ltd. forfeited 3,000 shares of ₹ 10 each (issued at ₹ 2 premium) for non-
payment of first call of ₹ 2 per share. Final call of ₹ 3 per share was not yet made. Out
of these 2,000 shares were re-issued at ₹ 10 per share as fully paid.
[CBSE SAMPLE PAPER 2023, 6 MARKS]
CBSE ADDITIONAL QUESTIONS FOR PRACTICE – CASE STUDY
Nidiya limited was incorporated on 1st April 2017 with registered office in Mumbai. The
capital clause of memorandum of Association reflected a registered capital of 8,00,000
equity shares of Rs.10 each and 1,00,000 preference shares of Rs.50 each. Since some
large investments were required for building and machinery the company in consultation
with vendors, Ms.VPS Enterprises, issued 1,00,000 equity shares and 20,000 preference
shares at par to them in full consideration of assets acquired. Besides this the company
issued 2,00,000 equity shares for cash at par payable as Rs 3 on application, 2 on
allotment, 3 on first call and 2 on second call. Till date second call has not yet been made
and all the shareholders have paid except Mr. Ajay who did not pay allotment and calls
on his 300 shares and Mr. Vipul who did not pay first call on his 200 shares. Shares of
Mr. Ajay were then forfeited and out of them 100 shares were reissued at Rs.12 per
share.
Based on above information you are required to answer the following questions.

1 Shares issue to vendors of building and machinery, Ms. VPS Enterprises, would be
classified as:
a. Preferential Allotment
b. Employee Stock Option Plan
c. Issue for Consideration other than cash
d. Right Issue of Shares

2 How many equity shares of the company have been subscribed?

a. 3,00,000
b. 2,99,500
c. 2,99,800
d. None of these

3 What is the amount of security premium reflected in the balance sheet at the end of the
year?
a. ₹200
b. ₹600
c. ₹400
 CBSE XII COMPILED BY SUDHIR SINHA
ACCOUNTANCY ACCOUNTING FOR SHARE CAPITAL

d. ₹1,000

4 What amount of share forfeiture would be reflected in the balance sheet?

a. ₹600
b. ₹900
c. ₹200
d. ₹ 300