Question 53:
Sangita Limited invited applications for issuing 60,000 shares of ₹10 each at par. The amount was payable as follows: on application ₹2 per share; on allotment₹3 per share; on first and final call ₹5 per share. Applications were received for 92,000 shares.
Allotment was made on the following basis: (a) to applicants for 40,000 shares: full; (b) to applicants for 50,000 shares: 40%; (c) to applicants for 2,000 shares: nil.
₹1,08,000 was realised on account of allotment (excluding the amount carried from application money)and ₹2,50,000 on account of call. The directors decided to forfeit shares of those applicants to whom full allotment was made and on which allotment money was overdue. Pass Journal entries in the books of Sangita Limited to record the above transactions.
(CBSE Sample Paper 2013)
Answer:
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Books of Sangita Limited Journal |
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Date |
Particulars |
L.F. |
Debit (₹) |
Credit (₹) |
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Bank A/c |
Dr. |
|
1,84,000 |
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|
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To Share Application A/c |
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|
1,84,000 |
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|
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(Share application money received for 92,000 shares at ₹2 each) |
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Share Application A/c |
Dr. |
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1,84,000 |
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To Share Capital A/c |
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1,20,000 |
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To Share Allotment A/c |
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|
60,000 |
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|
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To Bank A/c |
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|
4,000 |
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(Share application of 90,000 shares transferred to Share Capital, and excess adjusted on allotment and remaining amount returned) |
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Share Allotment A/c |
Dr. |
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1,80,000 |
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To Share Capital A/c |
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|
1,80,000 |
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(Share allotment due on 90,000 shares) |
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Bank A/c |
Dr. |
|
1,08,000 |
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To Share Allotment A/c |
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|
1,08,000 |
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(Share allotment money received) |
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Share capital A/c (4000×10) |
Dr. |
|
40,000 |
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To Share allotment A/c (4000×3) |
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|
12,000 |
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To Share First and Final Call A/c (4000×2) To Share Forfeiture A/c |
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|
20,000 8,000 |
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(4000 share forfeited) |
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Working notes;
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Shares applied |
Shares allotted |
Application Money received |
Share capital |
Share allotment |
Bank (Refund) |
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40,000 |
40,000 |
80,000 |
80,000 |
- |
- |
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40,000×2 |
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50,000 |
20,000 |
1,00,000 |
40,000 |
60,000 |
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50,000×2 |
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2,000 |
Nil |
4,000 |
- |
- |
4,000 |
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2,000×2 |
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92,000 |
90,000 |
1,84,000 |
1,20,000 |
60,000 |
4,000 |
|
Due on allotment 60,000×3 Transferred from application money |
= = |
1,80,000 60,000 |
|
Money received on allotment |
= |
120,000 1,08,000 |
|
Calls in arrears |
= |
12,000 |
No. of shares on which allotment money not received 12000/3=4000 shares
Question 54:
Alpha Ltd. issued 20,000 Equity Shares of ₹10 each at par payable: On application ₹2 per share; on allotment ₹3 per share; on first call ₹3 per share; on second and final call ₹2 per share.Mr. Gupta was allotted 100 shares. Pass necessary Journal entry relating to the forfeiture of shares in each of the following alternative cases:
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Case I: |
If Mr. Gupta failed to pay the allotment money and his shares were immediately forfeited. |
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Case II: |
If Mr. Gupta failed to pay allotment money and on his subsequent failure to pay the first call, his shares were forfeited. |
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Case III: |
If Mr. Gupta failed to pay the first call and on his subsequent failure to pay the second and final call, his shares were forfeited. |
Answer:
|
Application |
₹ |
2 |
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Allotment |
₹ |
3 |
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First Call |
₹ |
3 |
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Final Call |
₹ |
2 |
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|
10 |
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Books of Alpha Limited |
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Date |
Particulars |
L.F. |
Debit (₹) |
Credit (₹) |
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Case I |
Share Capital A/c (100×5) |
Dr. |
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500 |
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To Share Forfeiture A/c |
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200 |
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To Share Allotment A/c |
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300 |
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(100 shares of ₹10 each, ₹5 called-up, forfeited for the non-payment of allotment) |
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Case II |
Share Capital A/c (100 × 8) |
Dr. |
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800 |
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To Share Forfeiture A/c |
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200 |
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To Share Allotment A/c |
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300 |
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To Share First Call A/c |
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300 |
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(100 shares of ₹10 each, ₹8 called-up forfeited for non-payment allotment and first-call) |
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Case III |
Share Capital A/c |
Dr. |
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1,000 |
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To Share Forfeiture A/c |
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500 |
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To Share First Call A/c |
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300 |
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To Share Final Call A/c |
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200 |
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(100 shares of ₹10 each forfeited for the non-payment ₹5 each) |
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Question 55:
Chand Ltd. invited applications for issuing 1,00,000 equity shares of ₹10 each at a premium of ₹2 per share. The amount per share was payable as follows: ₹4 (including premium) on application, ₹5 on allotment and balance on first and final call. Applications were received for 1,80,000 shares of which applications for 30,000 shares were rejected and remaining applicants were allotted shares on pro rata basis. Mansi holding 5,000 shares failed to pay first and final call money and her shares were forfeited.
Pass necessary Journal entries for the above transactions in the books of the company. (CBSE 2024)
Answer:
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On Application: |
₹ 4 per share (including premium) |
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On Allotment: |
₹ 5 per share |
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On first and final Call: |
₹ 3 per share |
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Books of Chand Ltd. Journal |
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Date |
Particulars |
L.F. |
Debit (₹) |
Credit (₹) |
|
|
|
|
Bank A/c |
Dr. |
|
7,20,000 |
|
|
|
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To Share Application A/c |
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|
7,20,000 |
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|
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(Share application money received for 1,80,000 shares at ₹ 4 each) |
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Share Application A/c |
Dr. |
|
7,20,000 |
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To Share Capital A/c (1,00,000×2) |
|
|
2,00,000 |
|
|
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To Securities Premium Reserve A/c |
2,00,000 |
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To Share Allotment A/c |
|
|
2,00,000 |
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|
|
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To Bank A/c (30,000×4) |
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|
1,20,000 |
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(Share application of 1,00,000 shares transferred to Share Capital out of share applied 1,50,000 shares, and excess application money adjusted on allotment and amount on 30,000 shares returned) |
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Share Allotment A/c Dr. |
5,00,000 |
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To Share Capital A/c |
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5,00,000 |
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|
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(Share allotment due on 1,00,000 shares at ₹ 5 each) |
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Bank A/c Dr. |
3,00,000 |
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To Share Allotment A/c |
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|
3,00,000 |
|
|
|
|
(Share allotment money received) |
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|
|
|
|
|
|
Share First and Final Call A/c |
Dr. |
|
3,00,000 |
|
|
|
|
To Share Capital A/c |
|
3,00,000 |
|
||
|
|
(First and final call due on 1,00,000 shares at ₹ 3 each) |
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|
|||
|
|
Bank A/c |
Dr. |
|
2,85,000 |
|
|
|
|
To Share First and Final Call A/c |
|
2,85,000 |
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||
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|
(Share first and final call money received except Mansi holding 5,000 shares) |
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Share Capital A/c Dr. |
50,000 |
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To Share forfeited A/c |
35,000 |
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To Share First and Final Call A/c (Being 5,000 shares forfeited for non-payment of First and Final Call) |
15,000 |
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Question 56:
Sona Ltd. invited applications for issuing 60,000 equity shares of ₹50 each. The amount was payable as follows:
On Application ₹20 per share
On Allotment ₹25 per share
On First and Final Call Balance
Applications for 90,000 shares were received. Applications for 10,000 shares were rejected and application money refunded. Shares were allotted on pro rata basis to the remaining applicants. Excess money received with applications was adjusted towards sums due on allotment. Rahul, to whom 600 shares were allotted, failed to pay the allotment money and his shares were forfeited immediately. Afterwards, the first and final call was made. Mona, to whom 1,000 shares were allotted, failed to pay the first and final call. Her shares were also forfeited.
Pass necessary Journal entries in the books of Sona Ltd. for the above transactions.
(CBSE 2025)
Answer:
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In the Books of Sona Ltd. Journal |
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|
Date |
Particulars |
L.F. |
Debit (₹) |
Credit (₹) |
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|
|
Bank A/c (90,000×20) |
Dr. |
|
18,00,000 |
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To Equity Share Application A/c |
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18,00,000 |
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(Being Application for 90,000 shares were received) |
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Equity Share Application A/c |
Dr. |
18,00,000 |
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To Equity Share Capital A/c |
12,00,000 |
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To Equity share Allotment A/c |
4,00,000 |
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To Bank A/c |
2,00,000 |
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|
(Being Application money transferred for 60,000 shares, excess adjusted towards allotment and money on rejected applications refunded) |
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|
||||||||
|
Equity Shares Allotment A/c |
Dr. |
15,00,000 |
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|
To Equity Share Capital A/c |
|
15,00,000 |
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|
(Being Allotment money due on 60,000 shares @ ₹ 25 per share) |
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Bank A/c |
Dr. |
10,89,000 |
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Calls-in-Arrears A/c |
Dr. |
11,000 |
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To Equity Shares Allotment A/c |
|
11,00,000 |
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|
|
(Being Allotment money received except from Rahul ) |
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|
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|
Equity Share Capital A/c |
Dr. |
27,000 |
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To Forfeited Shares A/c |
|
16,000 |
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To Calls-in-Arrears A/c |
|
11,000 |
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|
(Being 600 shares of Rahul forfeited for non-payment of allotment money) |
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|
||||||||
|
Equity Shares First and Final Call A/c |
Dr. |
2,97,000 |
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To Equity Share Capital A/c |
|
2,97,000 |
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|
(Being First and Final Call made on 59,400 shares @ ₹ 5 per share) |
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|
Bank A/c |
Dr. |
2,92,000 |
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Calls-in-Arrears A/c |
Dr. |
5,000 |
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To Equity Shares First and Final Call A/c |
|
2,97,000 |
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|
(Being First and Final Call received except on Mona's 1,000 shares) |
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|
|
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|
Equity Share Capital A/c |
Dr. |
50,000 |
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|
To Forfeited Shares A/c |
|
45,000 |
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|
To Calls-in-Arrears A/c |
|
5,000 |
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|
(Being 1,000 shares of Mona forfeited for non-payment of First and Final Call) |
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Working Notes:
|
Applied Shares |
Allotted Shares |
Money received on Application @ ₹20 each |
Money transferred to Share Capital @ ₹20 each |
Excess |
Excess money adjusted on Allotment |
Excess money after Allotment to be refunded |
|
80,000 |
60,000 |
16,00,000 (80,000×20) |
12,00,000 (60,000×20) |
4,00,000 * (20,000×20) |
4,00,000 (20,000×20) |
- |
|
10,000 |
Nil |
2,00,000 (10,000×20) |
Nil |
2,00,000 |
- |
2,00,000 |
|
90,000 |
60,000 |
18,00,000 (90,000×20) |
12,00,000 (60,000×20) |
4,00,000 (20,000×20) |
2,00,000 |
*Note: Due on allotment for (20,000×25)
=5,00,000
so that total excess amount ( 4,00,000) left after transferring to share
capital can be transferred to allotment.
Ts Grewal Solution 2026-2027
Click below for more Questions
Class 12 / Volume – 2
Chapter 1- Company Accounts- Accounting for Share Capital
Question No. 1 To 4
Question No. 5 To 8
Question No. 9 To 12
Question No. 13 To 16
Question No. 17 To 20
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Question No. 25 To 28
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