12th | Accounting For Share Capital / Issue of share capital | Question No. 49 To 52 | Ts Grewal Solution 2026-2027

Question 49:

Light Lamps Ltd. issued 50,000 shares of ₹10 each as fully paid-up to the promoters for their services to set-up the company. It also issued 2,000 shares of ₹10 each credited as fully paid-up to the underwriters of shares for their services. Journalise these transactions.

Answer:

Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)

	Incorporation Expenses A/c	Dr.		5,00,000
	To Share Capital A/c (50,000×10)				5,00,000
	(Shares issued to promoters)

	Underwriting Commission A/c	Dr.		20,000
	To Underwriters’ A/c				20,000
	(Underwriting commission due)

	Underwriters’ A/c	Dr.		20,000
	To Share Capital A/c (2,000×10)				20,000
	(Shares issued to underwriters)

Forfeiture of Shares which were Issued at Par

Question 50:

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 reissued ₹12 per share as fully paid.

Pass entries for forfeiture and reissue of shares. (CBSE Sample Paper 2023)

Answer:

Books of Vikram Ltd. Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Share capital A/c (5,000×10)	Dr.		50,000
	To Share forfeited A/c (6,000×3)				18,000
	To Share Allotment A/c				22,000
	To Share First and Final Call A/c				10,000
	(Being share forfeited for non-payment)
	Bank A/c	Dr.		36,000
	To Share capital A/c				36,000
	To Securities Premium Reserve A/c				6,000
	(Being shares reissued)
	Share forfeited A/c	Dr.		10,800
	To Capital Reserve A/c				10,800
	(Being balance in Share forfeited account of reissued share transferred)

Working notes:

Amount paid-up 18,000

Amount to be transferred to capital reserve = 18,000÷5000×3,000

Question 51:

Avian Ltd. forfeited 10,000 shares of ₹10 each on which the first call of ₹4 per share was not received and the second and final call of ₹1 per share was not yet called. Out of these, 4,000 shares were reissued to Ajay as fully paid-up for ₹9 per share.

Pass entries for forfeiture and reissue of shares.

(CBSE 2025)

Answer:

	In the Books of Avian Ltd. Journal
Date		Particulars		L.F.	Debit (₹)	Credit (₹)
		Share Capital A/c (10,000×9)	Dr.		90,000
		To Share First Call A/c (10,000×4)				40,000
		To Share Forfeiture A/c				50,000
		(Being forfeiture of 10,000 shares for non-payment of the first call money.)

		Bank A/c	Dr.		36,000
		Share Forfeiture A/c	Dr.		4,000
		To Share Capital A/c				40,000
		(Being 4,000 forfeited shares reissued as fully paid-up for ₹ 9 per share.)

		Share Forfeiture A/c	Dr.		16,000
		To Capital Reserve A/c				16,000
		(Being profit on reissue of 4,000 shares transferred to capital reserve account.)

Working Note:

On 10,000 Shares Forfeited amount = ₹50,000

On 4,000 Shares Forfeited amount = ₹50,000×4,000÷10,000=20,000

Amount to be transferred to Capital Reserve = 20,000 - 4,000 =16,000

Question 52:

Show the forfeiture and reissue entries under each of the following

(i) Teer Ltd. forfeited 3,000 shares of ₹10 each for non-payment of final call of ₹2 per share.

These shares were reissued for ₹10 each as fully paid-up.

(ii) Alliance Ltd. forfeited 2,000 shares of ₹10 each for non-payment of final call of ₹2 per share.

These forfeited shares were reissued for ₹10 each as ₹7 paid-up.

Answer:

	In the Books of Teer Ltd. Journal
Date		Particulars			L.F.	Debit (₹)	Credit (₹)
		Share Capital A/c (10,000×9)		Dr.		30,000
		To Share Final Call (or Calls in Arrears A/c (10,000×4)					6,000
		To Share Forfeiture A/c					24,000
		((Being 3,000 shares forfeited for non-payment of final call))

		Bank A/c	Dr.			30,000
		To Share Capital A/c					30,000
		(Being 3,000 forfeited shares reissued @ ₹10 as fully paid-up)

		Share Forfeiture A/c	Dr.			24,000
		To Capital Reserve A/c					24,000
		(Being gain on reissue of forfeited shares transferred to capital reserve)

Working Notes:

(i) In the Books of Teer Ltd.

1. Forfeiture of 3,000 Shares:

· Called-up Value: 3,000 shares × ₹10 = ₹30,000

· Unpaid Final Call: 3,000 shares × ₹2 = ₹6,000

· Amount Forfeited (Paid-up): 3,000 shares × ₹8 = ₹24,000

2. Reissue of 3,000 Shares:

· Amount Received: 3,000 shares × ₹10 = ₹30,000

· Paid-up Value: 3,000 shares × ₹10 (fully paid) = ₹30,000

3. Transfer of Gain to Capital Reserve:

· Capital Reserve: Total Amount Forfeited (₹24,000) − Discount Allowed on Reissue (₹0) = ₹24,000

	In the Books of Alliance Ltd. Journal
Date		Particulars			L.F.	Debit (₹)	Credit (₹)
		Share Capital A/c (2,000×10)		Dr.		20,000
		To Share Final Call (or Calls in Arrears A/c (2,000×2)					4,000
		To Share Forfeiture A/c					16,000
		((Being 2,000 shares forfeited for non-payment of final call))

		Bank A/c (2,000×10)	Dr.			20,000
		To Share Capital A/c (2,000×7)					14,000
		To Securities Premium Reserve A/c (2,000×3)					6,000
		(Being 2,000 forfeited shares were reissued for ₹10 each as ₹7 paid-up.)

		Share Forfeiture A/c	Dr.			16,000
		To Capital Reserve A/c					16,000
		(Being gain on reissue of forfeited shares transferred to capital reserve)

Working Notes:

(i) In the Books of Alliance Ltd.

1. Forfeiture of 2,000 Shares:

· Called-up Value: 2,000 shares × ₹10 = ₹20,000

· Unpaid Final Call: 2,000 shares × ₹2 = ₹4,000

· Amount Forfeited (Paid-up): 2,000 shares × ₹8 = ₹16,000

2. Reissue of 3,000 Shares:

· Amount Received: 2,000 shares × ₹10 = ₹20,000

· Paid-up Value: 2,000 shares × ₹10 (fully paid) = ₹30,000

3. Transfer of Gain to Capital Reserve:

· No loss on issue of discount therefore total amount of forfeited on reissue will be transferred to capital reserve account.

Ts Grewal Solution 2026-2027

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12th | Accounting For Share Capital / Issue of share capital | Question No. 49 To 52 | Ts Grewal Solution 2026-2027

Question 49:

Answer:

Forfeiture of Shares which were Issued at Par

Question 50:

Chapter 1- Company Accounts- Accounting for Share Capital