12th | Accounting For Share Capital / Issue of share capital | Question No. 17 To 20 | Ts Grewal Solution 2026-2027

Question 17:

Bharat Ltd. was incorporated with a capital of ₹20,00,000 divided into shares of ₹10 each. 20,000 shares were of fered for subscription and out of these, 18,000 shares were applied for and allotted. ₹3 per share (including ₹1 premium) was payable on application, ₹4 per share (including ₹1 premium) on allotment, ₹2 per share on first call and ₹3 per share on final call. All the money was received. Give necessary Journal entries and show share capital in the Balance Sheet.

Answer:

Authorised Capital 20,000 shares of ₹10 each

Issued Capital 2,000 shares

Applied 18,000 shares

Payable as:
Application	₹	3	(2+1)
Allotment	₹	4	(3+1)
First Call	₹	2
Final Call	₹	3
		12	(10+2)

Books of Bharat Limited Journal
Date	Particulars			L.F.	Debit (₹)	Credit (₹)

	Bank A/c		Dr.		54,000
	To Share Application A/c					54,000
	(Application money received for 1,800 shares at ₹3 per shares)

	Share Application A/c		Dr.		54,000
	To Share Capital A/c					36,000
	To Securities Premium A/c					18,000
	(Application money of 18,000 share transferred to Share Capital at ₹2 per share and Securities Premium Re 1 per share)

	Share Allotment A/c		Dr.		72000
	To Share Capital A/c					54,000
	To Securities Premium A/c					18,000
	(Share allotment due on 18,000 shares at ₹4 per share including Re 1 securities premium)

	Bank A/c		Dr.		72,000
	To Share Allotment A/c					72,000
	(Share Allotment money received)

	Share First Call A/c		Dr.		36,000
	To Share Capital A/c					36,000
	(Share first call due on 18,000 shares at ₹2 per shares)

	Bank A/c		Dr.		36,000
	To Share First Call A/c					36,000
	(Share first call money received)

	Share Final Call A/c		Dr.		54,000
	To Share Capital A/c					54,000
	(Share final call due on 18,000 shares at ₹3 per share)

	Bank A/c				54,000
	To Share Final Call A/c	Dr.				54,000
	(Share final call money received)

As per the Schedule III of Companies Act, 2013, the Company's Balance Sheet is presented as follows.

Bharat Limited
An extract of Balance Sheet
Particulars	Note No.	(₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital	1	1,80,000

NOTES TO ACCOUNTS


Note No.	Particulars	(₹)
1	Share Capital
	Authorised Share Capital
	20,000 shares of ₹10 each	2,00,000
	Issued Share Capital
	2,000 shares of ₹10 each	20,000
	Subscribed, Called-up and Paid-up Share Capital
	18,000 shares of ₹10 each	1,80,000

Question 18:

Authorized capital of Suhani Ltd . is ₹45,00,000 divided into 30,000 shares of ₹150 each . Out of these company issued 15,000 shares of ₹150 each at a premium of ₹10 per share . the amount was payable as follows:
₹50 per share on application , ₹40 per share on allotment (including premium ), ₹30 per share on firs t call and balance on final call . Public applied for 14,000 shares. All the money was duly received .
Prepare an extract of Balance Sheet of Suhani Ltd . as per Schedule III , Part I of the companies Act, 2013 disclosing the above information . Also prepare 'Notes to Accounts ' for the same.

Answer:

Suhani Ltd.
Balance Sheet
Particulars	Note No.	(₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital	1	21,00,000
b. Reserves and Surplus	2	1,40,000
2. Non-Current Liabilities
3. Current Liabilities
Total		22,40,000

II. Assets
1. Non-Current Assets
2. Current Assets
a. Cash and Cash Equivalents	3	22,40,000
Total		22,40,000

NOTES TO ACCOUNTS


Note No.	Particulars	(₹)
1	Share Capital
	Authorised Share Capital
	30,000 shares of ₹150 each	45,00,000
	Issued Share Capital
	15,000 shares of ₹150 each	22,50,000
	Subscribed, Called-up and Paid-up Share Capital
	14,000 shares of ₹150 each	21,00,000

2	Reserves and Surplus
	Securities Premium	1,40,000

3	Cash and Cash Equivalents
	Cash at Bank	22,40,000

Over Subscription

Question 19:

Bright Ltd. issued 80,000 Equity Shares of 10 each against which it received applications for 1,20,000 Shares. Application Money was 4, Allotment Money and First and Final Call was of 3 each.

Pass the Journal entry for allotment of shares in each of the following cases:

Case 1: Excess Applications were rejected.

Case 2: Pro rata allotment is made.

Case 3: Applications for 20,000 Shares were refused allotment and pro rata allotment was made to remaining.

Case 4: Applications for 10,000 Shares were refused allotment, applications for 10,000 shares were allotted the shares applied and pro rata allotment was made to the remaining.

Answer:

In the books of Bright Ltd. Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Share Application A/c (1,20,000 ×4)	Dr.		4,80,000
	To Share Capital A/c (80,000 × 4)				3,20,000
	To Bank A/c (40,000 × 4)				1,60,000
	(Being application money transferred to share capital and excess application money refunded)

Case II:

In the books of Bright Ltd. Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Share Application A/c (1,20,000 ×4)	Dr.		4,80,000
	To Share Capital A/c (80,000 × 4)				3,20,000
	To Share Allotment A/c (40,000 × 4)				1,60,000
	(Being application money transferred to share capital and excess application money transferred to share allotment)

Case III:

In the books of Bright Ltd. Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Share Application A/c (1,20,000 ×4)	Dr.		4,80,000
	To Share Capital A/c (80,000 × 4)				3,20,000
	To Share Allotment A/c				80,000
	To Bank A/c (20,000 × 4)				80,000
	(Being application money transferred to share capital and application money transferred to share allotment and excess refunded)

Case IV:

In the books of Bright Ltd. Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Share Application A/c (1,20,000 ×4)	Dr.		4,80,000
	To Share Capital A/c (80,000 × 4)				3,20,000
	To Share Allotment A/c (40,000 × 3)				1,20,000
	To Bank A/c (10,000 × 4)				40,000
	(Being application money transferred to share capital and application money transferred to share allotment and excess refunded)

Question 20:

Faber Ltd. company invited applications for 70,000 equity shares of ₹100 each. The application money received @ ₹30 per share was ₹27,00,000. Name the kind of subscription. List the three alternatives for allotting these shares.

Answer:

Total Money Received on Application = ₹27,00,000
Application money per share = ₹30
Number of shares applied by the public=Total Appliaction money ReceivedApplication money per share=27,00,000÷30=90,000 shares

Share Applications invited by the company = 70,000
Since, Number of Shares applied for by the company exceeds the number of shares offered by the company by 15,000 shares (i.e. 90,000 – 70,000). Therefore, it is a case of oversubscription of shares.
The alternatives available with the company are as follows:
1. By rejecting the excess applications and allotting only 70,000 shares.
2. By making allotment to the 90,000 shares applicants on a proportionate or pro-rata basis.
3. By making allotment to some on pro-rata basis and rejecting some applicants. For e.g.: 85,000 share applicants are given 70,000 shares on pro-rata basis and the remaining 5,000 shares have been rejected.

Ts Grewal Solution 2026-2027

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12th | Accounting For Share Capital / Issue of share capital | Question No. 17 To 20 | Ts Grewal Solution 2026-2027

Chapter 1- Company Accounts- Accounting for Share Capital