Question 97:
Panasonic Ltd. was formed on 1st April, 2024 with an authorised capital of ₹2,00,000 , divided into 2,000 Equity Shares of ₹100 each. 1,000 shares were issued as fully paid to the vendors of building for payment of the purchase consideration. The remaining 1,000 shares were of fered or public subscription at a premium of ₹5 per share payable as:
|
On application |
₹10 per share, |
|
On allotment |
₹25 per share(including premium), |
|
On first call |
₹40 per share, |
|
On final call |
₹30 per share. |
Applications were received for 900 shares which were duly allotted and the
allotment money was received in full . At the time of the first call, a
shareholder who held 100 shares failed to pay the first call money and his
shares were forfeited. These shares were reissued @ ₹60 per share
, ₹70 per share
paid-up.
Final call has not been made.
You are required to
(i) give necessary journal entries to record the above transactions and
(ii) show how share capital would appear in the Balance Sheet of the
company.
Answer:
Authorised Capital: 2,000 equity shares at ₹100 each
Issued Capital:
1,000 equity shares at ₹100 each to the vendor of the building
1,000 equity shares at ₹100 each with a premium ₹5 to the public
Applied by public: 900 equity shares
Payable by public as:
|
Application |
₹ |
10 |
|
|
Allotment |
₹ |
25 |
(20+5) |
|
First Call |
₹ |
40 |
|
|
Called-up |
|
75 |
(70+5) |
|
Final Call |
₹ |
30 |
|
|
|
₹ |
105 |
(100+5) |
|
Books of Panasonic Limited Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit ₹ |
Credit ₹ |
|
|
|
|
|
|
|
|
|
|
Building A/c |
Dr. |
|
1,00,000 |
|
|
|
To Vendor A/c |
|
|
1,00,000 |
|
|
|
(Building purchased from the vendor) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Vendor A/c |
Dr. |
|
1,00,000 |
|
|
|
To Equity Share Capital A/c |
|
|
1,00,000 |
|
|
|
(1,000 equity shares of ₹100 each issued to the vendor of building) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
9,000 |
|
|
|
To Equity Share Application A/c |
|
|
9,000 |
|
|
|
(Share application money received for 900 shares at ₹10 each) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share Application A/c |
Dr. |
|
9,000 |
|
|
|
To Equity Share Capital |
|
|
9,000 |
|
|
|
(Share application money of 900 shares at ₹10 each transferred to Share Capital) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share Allotment A/c |
Dr. |
|
22,500 |
|
|
|
To Securities Premium |
|
|
4,500 |
|
|
|
To Equity Share Capital A/c |
|
|
18,000 |
|
|
|
(Share allotment due on 900 shares at ₹25 each including ₹5 premium) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
22,500 |
|
|
|
To Equity Share Allotment A/c |
|
|
22,500 |
|
|
|
(Share allotment money received on 900 shares at ₹25 each) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share First Call A/c |
Dr. |
|
36,000 |
|
|
|
To Equity Share Capital A/c |
|
|
36,000 |
|
|
|
(First call due on 900 shares at ₹40 each) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
32,000 |
|
|
|
Calls-in-Arrears A/c |
|
4,000 |
|
|
|
|
To Equity Share First-call A/c |
|
|
36,000 |
|
|
|
(First call received on 800 shares and a holder of 100 shares failed to pay it) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share Capital A/c |
Dr. |
|
7,000 |
|
|
|
To Share Forfeiture A/c |
|
|
3,000 |
|
|
|
To Calls-in-Arrears A/c |
|
|
4,000 |
|
|
|
(100 shares of ₹100 each, ₹70 called-up forfeited for the non-payment of ₹40) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
6,000 |
|
|
|
Share Forfeiture A/c |
Dr. |
|
1,000 |
|
|
|
To Equity Share Capital A/c |
|
|
7,000 |
|
|
|
(100 shares of ₹100 each, re-issued at ₹60 per share as ₹70 paid-up) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Forfeiture A/c |
Dr. |
|
2,000 |
|
|
|
To Capital Reserve A/c |
|
|
2,000 |
|
|
|
(Balance in Share Forfeiture the Account after re-issue transferred to Capital Reserve) |
|
|
|
|
|
|
|
|
|
|
|
As per the Schedule III of Companies Act 2013, the Company's Balance Sheet is presented as follows.
|
PanasonicLtd. |
||
|
Balance Sheet |
||
|
Particulars |
Note No. |
(₹) |
|
I. Equity and Liabilities |
|
|
|
1. Shareholders’ Funds |
|
|
|
a. Share Capital |
1 |
1,63,000 |
|
b. Reserves and Surplus |
2 |
6,500 |
|
2. Non-Current Liabilities |
|
|
|
3. Current Liabilities |
|
|
|
Total |
|
1,69,500 |
|
|
|
|
|
II. Assets |
|
|
|
1. Non-Current Assets |
|
|
|
a. Fixed Assets |
|
|
|
i. Tangible Assets |
3 |
1,00,000 |
|
2. Current Assets |
|
|
|
a. Cash and Cash Equivalents |
4 |
69,500 |
|
Total |
|
1,69,500 |
|
|
|
|
NOTES TO ACCOUNTS
|
|
|||
|
Note No. |
Particulars |
(₹) |
|
|
1 |
Share Capital |
|
|
|
|
Authorised Share Capital |
|
|
|
|
2,000 Equity Shares of ₹100 each |
2,00,000 |
|
|
|
Issued Share Capital |
|
|
|
|
2,000 Equity Shares of ₹100 each |
2,00,000 |
|
|
|
Subscribed, Called-up and Paid-up Share Capital |
|
|
|
|
1,000 Equity Shares of ₹100 each(for consideration other than cash) |
1,00,000 |
|
|
|
900 Equity Shares of ₹100 each, ₹70 Called-up |
63,000 |
1,63,000 |
|
|
|
|
|
|
2 |
Reserves and Surplus |
|
|
|
|
Securities Premium |
4,500 |
|
|
|
Capital Reserve |
2,000 |
6,500 |
|
|
|
|
|
|
3 |
Tangible Assets |
|
|
|
|
Building |
1,00,000 |
|
|
|
|
|
|
|
4 |
Cash and Cash Equivalents |
|
|
|
|
Cash at Bank |
69,500 |
|
|
|
|
|
|
Working Notes:
|
Share Forfeiture (at the time of forfeiture) |
3,000 |
Credit |
|
Less: Share Forfeiture (at the time of re-issue) |
1,000 |
Debit |
|
Balance in Share Forfeiture (after re-issue) |
2,000 |
Credit |
Capital Reserve = Balance in Share Forfeiture (after re-issue) = ₹2,000
Question 98:
Sukanya Ltd. invited applications for issuing 1,00,000 equity shares of ₹ 10 each. The shares were issued at a premium of ₹ 20 per share. The amount was payable as follows:
|
On Application and Allotment |
— |
₹14 per share (including premium of ₹ 10), |
|
On First Call |
— |
₹ 8 per share (including premium of ₹ 5), |
|
On Final Call |
— |
₹ 8 per share (including premium of ₹ 5). |
Applications for 96,000 shares were received. Rohit , a shareholder holding
7,000 shares, failed to pay both the calls and Namit , a holder of 5,000
shares , did not pay the final call.
Shares of Rohit and Namit were forfeited . Of the forfeited shares 8,000
shares including all the shares of Rohit were reissued to Reena
at ₹ 8 per share
fully paid-up.
Pass necessary journal entries for the above transactions in the books of
Sukanya Ltd. (CBSE 2016 C)
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit (₹) |
Credit (₹) |
|
|
|
Bank A/c (96,000×14) |
Dr. |
|
13,44,000 |
|
|
|
To Equity Share Application and Allotment A/c |
|
|
|
13,44,000 |
|
|
(Application money received) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share Application and Allotment A/c |
Dr. |
|
13,44,000 |
|
|
|
To Equity Share Capital A/c (96,000×4) |
|
|
|
3,84,000 |
|
|
To Security Premium Reserve A/c (96,000×10) |
|
|
|
9,60,000 |
|
|
(Application money adjusted to Share Capital) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share First Call A/c (96,000×8) |
Dr. |
|
7,68,000 |
|
|
|
To Equity Share Capital A/c (96,000×3) |
|
|
|
2,88,000 |
|
|
To Security Premium Reserve A/c (96,000×5) |
|
|
|
4,80,000 |
|
|
(First call money due) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c (7,68,000 – 56,000) |
Dr. |
|
7,12,000 |
|
|
|
To Equity Share First Call A/c |
|
|
|
7,12,000 |
|
|
(First call money received) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share Second Call A/c (96,000×8) |
Dr. |
|
7,68,000 |
|
|
|
To Equity Share Capital A/c (96,000×3) |
|
|
|
2,88,000 |
|
|
To Security Premium Reserve A/c (96,000×5) |
|
|
|
4,80,000 |
|
|
(Second call money due) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c (7,68,000 – 56,000 – 40,000) |
Dr. |
|
6,72,000 |
|
|
|
To Equity Share Second Call A/c |
|
|
|
6,72,000 |
|
|
(Second call money received) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Share Capital A/c |
Dr. |
|
1,20,000 |
|
|
|
Security Premium Reserve A/c (7,000×10 + 5,000×5) |
Dr. |
|
95,000 |
|
|
|
To Equity Share First Call A/c |
|
|
|
56,000 |
|
|
To Equity Share Second Call A/c |
|
|
|
96,000 |
|
|
To Shares Forfeited A/c (7,000×4 + 5,000×7) |
|
|
|
63,000 |
|
|
(Shares Forfeited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c (8,000×8) |
Dr. |
|
64,000 |
|
|
|
Shares Forfeited A/c (8,000×2) |
Dr. |
|
16,000 |
|
|
|
To Equity Share Capital A/c |
|
|
|
80,000 |
|
|
(Shares Reissued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Forfeited A/c |
Dr. |
|
19,000 |
|
|
|
To Capital Reserve A/c |
|
|
|
19,000 |
|
|
(Prof it on Reissue transferred to Capital Reserve A/c) |
|
|
|
|
|
|
|
|
|
|
|
Working Notes:
WN1: Amount transferred to Capital Reserve
Amount forfeited on reissued shares of Rohit = ₹28,000
Amount forfeited on reissued shares of Namit=Amount Forfeited×Shares Re-issuedShares Forfeited
=35,000×1,0005,000=7,000
Total amount forfeited on reissued shares = 28,000 + 7,000 = ₹35,000
Amount transferred to Capital Reserve = 35,000 – 16,000 = ₹19,000
Question 99:
Abhipra Ltd. invited applications for issuing 1,00,000 equity shares of ₹10 each. The shares were issued at a premium of ₹20 per share. The amount was payable as follows:
On Application ₹14 per share (including premium of ₹10),
On Allotment ₹8 per share (including premium of ₹5)
On First and Final Call ₹8 per share (including premium of ₹5).
Applications for 90,000 shares were received. Paresh, a shareholder holding 5,000 shares, did not pay the allotment money and call. While Dharam, holder of 3,000 shares, did not pay the call. Shares of Paresh and Dharam were forfeited. Of the forfeited shares, 5,000 shares including 3,000 shares of Paresh and 2,000 shares of Dharam were reissued to Parul at 8 per share as fully paid-up.
Pass necessary Journal entries for the above transactions in the books of Abhipra Ltd.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit (₹) |
Credit (₹) |
|
|
|
Bank A/c (90,000×14) |
Dr. |
|
12,60,000 |
|
|
|
To Share Application A/c |
|
|
|
12,60,000 |
|
|
(Being share application money received) |
|
|
|
|
|
|
Share Application A/c (90,000×14) |
Dr. |
|
12,60,000 |
|
|
|
To Share Capital A/c (90,000×4) |
|
|
|
3,60,000 |
|
|
To Securities Premium Reserve A/c (90,000×10) |
|
|
|
9,00,000 |
|
|
(Being share application money transferred to share capital and Securities Premium Reserve) |
|
|
|
|
|
|
Share allotment A/c (90,000×8) |
Dr. |
|
7,20,000 |
|
|
|
To Share Capital A/c (90,000×3) |
|
|
|
2,70,000 |
|
|
To Securities Premium Reserve A/c (90,000×5) |
|
|
|
4,50,000 |
|
|
(Being share allotment money transferred to share capital and Securities Premium Reserve) |
|
|
|
|
|
|
Bank A/c (85,000×8) |
Dr. |
|
6,80,000 |
|
|
|
To Share Allotment A/c |
|
|
|
6,80,000 |
|
|
(Being share allotment money received and except 5,000 shares) |
|
|
|
|
|
|
Share First and Final Call A/c (90,000×8) |
Dr. |
|
7,20,000 |
|
|
|
To Share Capital A/c (90,000×3) |
|
|
|
2,70,000 |
|
|
To Securities Premium Reserve A/c (90,000×5) |
|
|
|
4,50,000 |
|
|
(Being share First and Final Call money transferred to share capital and Securities Premium Reserve) |
|
|
|
|
|
|
(Being first and final call due) |
|
|
|
|
|
|
Bank A/c [(90,000-8,000) ×3] |
Dr. |
|
6,56,000 |
|
|
|
To Share First and Final A/c |
|
|
|
6,56,000 |
|
|
(Being share First and Final money received except [5,000+3,000] 8,000 shares) |
|
|
|
|
|
|
Share Capital A/c (8,000×10) |
Dr. |
|
80,000 |
|
|
|
Securities Premium Reserve A/c |
Dr. |
|
65,000 |
|
|
|
(5,000×10+3,000×5) |
|
|
|
|
|
|
To Forfeited Shares A/c (4,000×7) |
|
|
|
41,000 |
|
|
To Share Allotment A/c |
|
|
|
40,000 |
|
|
To Share First and Final A/c |
|
|
|
64,000 |
|
|
(Being share forfeited for allotment and First and Final Calls of 5,000 shares and for First and Final Calls of 3,000 shares) |
|
|
|
|
|
|
Bank A/c (5,000×8) |
Dr. |
|
40,000 |
|
|
|
Forfeited Shares A/c (5,000×2) |
|
|
10,000 |
|
|
|
To Share Capital A/c (5,000×10) |
|
|
|
50,000 |
|
|
(Being 5,000 shares forfeited reissued at ₹8 as fully paid-up) |
|
|
|
|
|
|
Forfeited Shares A/c |
Dr. |
|
16,000 |
|
|
|
To Capital Reserve A/c |
|
|
|
16,000 |
|
|
(Being full amount Forfeited on 2,000 Shares reissued, transferred to Capital Reserve) |
|
|
|
|
|
|
|
|
|
|
|
Working notes:
Forfeited amount of Paresh 3,000 shares 20,000÷5,000×3,000= 12,000
Forfeited amount of Parul 2,000 shares 21,000÷3,000×2,000= 14,000
Total Forfeited amount = 12,000+14,000=26,000
Amount to be transferred to capital reserve = Total Forfeited amount – Discount on reissue
16,000= 26,000-10,000
Determination of Amount Realised from Reissue of Shares
Question 100:
"Sagar Ltd.' forfeited 1,000 shares of 10 each for non-payment of first and final call of ₹2 per share. These shares were reissued and gain on reissue transferred to Capital Reserve was 5,000. Determine the amount realised from reissue of shares.
Answer:
Amount forfeited on 1,000 shares par shares is ₹8 = ₹8,000
Amount transferred to capital reserve = ₹5,000
Face value of all reissued shares = ₹10,000 (1,000×₹10)
Amount of discount = ₹8,000 - ₹5,000 = ₹3,000
Therefore, amount realized from reissue of shares = ₹10,000 - ₹3,000 = ₹7,000
Reissue price par share = ₹7,000 ÷ 1,000 = ₹7
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
Question No. 21 To 24
Question No. 25 To 28
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