12th | Accounting For Share Capital / Issue of share capital | Question No. 85 To 88 | Ts Grewal Solution 2026-2027

Question 85:

Software Ltd. company with registered capital of ₹5,00,000 in shares of ₹10 each issued 20,000 of such shares payable ₹2 on application, ₹4 on allotment, ₹2 on first call and ₹2 on final call. AIl the money payable on allotment was received but on the first call being made, one shareholder paid the entire balance on his holding of 300 shares and five shareholders with a total holding of 1,000 shares did not pay their dues on the first call. These shares were forfeited for non-payment of first call money. Final call was made and all the money due was received. Later on, forfeited shares were reissued @ ₹6 per share as fully paid-up.

Record the above in the company's Journal and prepare the Balance Sheet.

Answer:

On Application:	₹ 2 per share (including premium)
On Allotment:	₹ 4 per share
On first Call:	₹ 2 per share
On final Call:	₹ 2 per share

Books of Software Ltd. Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Bank A/c	Dr.		40,000
	To Share Application A/c				40,000
	(Share application money received for 20,000 shares at ₹ 2 each)
	Share Application A/c	Dr.		40,000
	To Share Capital A/c				40,000
	(Share application of 20,000 shares transferred to Share Capital)
	Share Allotment A/c Dr.			80,000
	To Share Capital A/c				80,000
	(Share allotment due on 20,000 shares at ₹ 4 each)
	Bank A/c Dr.			80,000
	To Share Allotment A/c				80,000
	(Share allotment money received)
	Share First Call A/c	Dr.		40,000
	To Share Capital A/c				40,000
	(First and final call due on 20,000 shares at ₹ 2 each)
	Bank A/c	Dr.		38,600
	To Share First Call A/c				38,000
	To Share Final Call A/c				600
	(Share first call money received except Mansi holding 5,000 shares)
	Share Capital A/c (1,000×8) Dr.			8,000
	To Share forfeited A/c (1,000×6)				6,000
	To Share First Call A/c (1,000×2) (Being 1,000 shares forfeited for non-payment of Final Call)				2,000
	Share Final Call A/c Dr.			38,000
	To Share Capital A/c				38,000
	(Final call due on 19,000 shares at ₹ 2 each)
	Bank A/c Dr.			37,400
	To Share First Call A/c				37,400
	(Being share final call money for 19,000 shares received except 300 shares which have already been received)
	Bank A/c (1,000×6) Dr.			6,000
	Share forfeited A/c (1,000×4) Dr.			4,000
	To Share Capital A/c (1,000×10)				10,000
	(Being 1,000 forfeited shares were reissued @ ₹6 per share as fully paid-up)
	Share forfeited A/c Dr.			2,000
	To Capital Reserve A/c				2,000
	( Being balance in the forfeited amount of 1000 shares transfer to capital reserve account)

Amount transferred to Capital reserve Account

= 6,000- 4,000 (Discount on Re-issue) = 2,000

Balance Sheet of Fancy co. Ltd.
Particulars	Note No.	(₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital	1	2,00,000
b. Reserves and Surplus	2	2,000
Total		2,02,000
II Assets
2. Current Assets
a. Cash and Cash Equivalents	3	2,02,000
Total		2,02,000

Notes to Accounts
Particulars		(₹)
1. Share Capital
Authorised Share Capital
50,000 Shares of ₹ 10 each		5,00,000
Issued Share Capital
20,000 Shares of ₹ 10 each		2,00,000
Subscribed Share Capital
*Fully Called-up & Paid-up Capital*
20,000 Shares of ₹ 10 each		2,00,000
		2,00,000
2. Reserves and Surplus
Capital Reserve		2,000

3. Cash and Cash Equivalents
Bank		2,02,000

Question 86:

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 call of ₹4 per Pass Journal entries in the books of X Ltd. for the above. (NCERT, Modified)

Answer:


Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	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 of ₹10 each forfeited for non–payment of allotment money of ₹8 per share including premium of ₹4 per share)

	Bank A/c	Dr.		2,250
	To Share Capital A/c				1,500
	To Securities Premium A/c				750
	(150 shares of ₹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)

Question 87:

Sierra Ltd. forfeited 500 shares of ₹10 each, issued at a premium of ₹2 per share (payable with allotment) for non-payment of allotment money of ₹5 per share (including premium). The first and final call of ₹3 per share was not made. All the forfeited shares were reissued at ₹11 per share, fully paid-up.

Pass Journal entries for forfeiture and reissue of shares.

(CBSE 2025)

Answer:

Amount was payable as below:

	Face value	Premium	Issue Price
Application	4		=4	Called up and paid up
Allotment	3	+2	=5	Called up but Not paid
first and final	3		=3	Call Not made
	10	+2	=12

	In the Books of Sierra Ltd. Journal
Date		Particulars		L.F.	Debit (₹)	Credit (₹)
		Equity Share Capital A/c (500×7)	Dr.		3,500
		Securities Premium Reserve A/c (500×2)	Dr.		1,000
		To Forfeited Shares A/c (500×4)				2,000
		To Share Allotment A/c (500×5)				2,500
		(Being 500 shares forfeited for non-payment of allotment of ₹5 per share (including premium ₹2), with ₹9 called up per share)

		Bank A/c (500×11)	Dr.		5,500
		To Equity Share Capital A/c				5,000
		To S.P.R. A/c				500
		(Being 500 forfeited shares reissued at ₹11 per share as fully paid-up)

		Forfeited Shares A/c	Dr.		2,000
		To Capital Reserve A/c				2,000
		(Being the gain on reissue of 500 shares transferred to Capital Reserve)

Question 88:

The Directors of a company forfeited 300 shares of ₹10 each issued at a premium of ₹3 per share , for the non-payment of the first call money of ₹2 per share . The final call of ₹2 per share has not been made. Half the forfeited shares were reissued at ₹1,500 as fully paid-up. Record the journal entries for the forfeiture and reissue of shares.

(CBSE 2009)

Answer:

Journal Entries
Date	Particulars		L.F.	Debit ₹	Credit ₹

	Share Capital A/c (300 × 8)	Dr.		2,400
	To Share Forfeiture A/c (300 × 6)				1,800
	To Calls-In-Arrears (300 × 2)				600
	(300 shares of ₹10 each on which ₹8 had called, forfeited for non-payment ₹2 per share)

	Bank A/c	Dr.		1,500
	To Share Capital A/c				1,500
	(150 shares of ₹10 each re-issued for the sum of ₹1,500)

	Share Forfeiture A/c	Dr.		900
	To Capital Reserve A/c				900
	(Balance in Share Forfeiture Account of 150 re-issued shares, transferred to Capital Reserve)

Working Notes

Share Forfeiture of Re-issued Shares

Share Forfeiture

(at the time of forfeiture)

Cr.

Less: Share Forfeiture

(at the time of re-issue)

Dr.

NIL

Balance in Share Forfeiture after re-issue

Cr.

per share

Capital Reserve = Balance in Share Forfeiture after reissue (per share) × Number of Shares Reissued

= ₹6 × 150

= ₹900

Ts Grewal Solution 2026-2027

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Class 12 / Volume – 2

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12th | Accounting For Share Capital / Issue of share capital | Question No. 85 To 88 | Ts Grewal Solution 2026-2027

Chapter 1- Company Accounts- Accounting for Share Capital