12th | Accounting for Share Capital | Question No. 105 To 108 | Ts Grewal Solution 2025-2026

Question 105:

XYZ Ltd . is registered with an authorised capital of ₹2,00,000 divided into 2,000 shares of ₹100 each of which , 1,000 shares were of fered for 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 1,800 shares, of which applications for 300 shares were rejected outright; the rest of the application were allotted 1,000 shares on pro rata basis. Excess application money was transferred to allotment.
All the money was duly received except from Sundar , holder of 100 shares, who failed to pay allotment and first call money. His shares were later forfeited and reissued to Shyam at ₹60 per share ₹70 paid-up. Final call has not been made.
Pass necessary Journal entries and prepare Cash Book in the books of XYZ Limited. (CBSE 2016)

Answer:

Authorised capital 2,000 shares of ₹100 each.

Issued 1,000 shares of ₹100 each at premium of ₹5

Applied 1,800 shares

Allotment made as:		Amount payable per shares as:
Applied	Allotted	Application	₹10
1,500	1,000	Allotment	₹25	(20 + 5)
300	NIL	First Call	₹40
			₹75	Called-up
		Final Call	₹30
1,800	1,000		₹105

Books of XYZ Limited Journal
Date	Particulars		L.F.	Debit Amount ₹	Credit Amount ₹

	Share Application A/c	Dr.		15,000
	To Share Capital A/c				10,000
	To Share Allotment A/c				5,000
	(Share application of 1,000 shares transferred to Share Capital, ₹5,000 adjusted on allotment)

	Share Allotment A/c	Dr.		25,000
	To Share Capital A/c				20,000
	To Securities Premium A/c				5,000
	(Share allotment due on 1,000 shares at ₹25 each including ₹5 premium)

	Share First Call A/c	Dr.		40,000
	To Share Capital A/c				40,000
	(First call due on 1,000 shares at ₹40 each)

	Securities Premium A/c	Dr.		500
	Share Capital A/c	Dr.		7,000
	To Share Forfeiture A/c				1,500
	To Share Allotment A/c				2,000
	To Share First Call A/c				4,000
	(100 shares of ₹100 each ₹70 called–up, forfeited for the non-payment of allotment and first call)

	Share Forfeiture A/c	Dr.		1,000
	To Share Capital A/c				1,000
	(100 shares of ₹100 each re-issued at ₹60 per share, ₹70 paid-up)

	Share Forfeiture A/c	Dr.		500
	To Capital Reserve A/c				500
	(Balance in Share Forfeiture after re-issue transferred to Capital Reserve)

Cash Book
Dr.						Cr.
Date	Particulars	Bank ₹	Date	Particulars	Bank ₹

	Share Application	18,000		Share Application	3,000
	Share Allotment	18,000
	Share First Call	36,000
	Share Capital	6,000		Balance c/d	75,000
		78,000			78,000

Working Notes:

Number of share applied by Sunder	=	1,500×100/1,000
	=	150 shares

Sunder

Money received on application 150 × ₹10	=	1,500
Money transferred to Share Capital 100 × ₹10	=	1,000
Excess Money on application		500

Share allotment due 100 × ₹25	=	2,500
*Less*: Excess money on application	=	500
Calls-in-Arrears on Allotment		2,000

Allotment

Allotment due on all shares 1,000 × ₹25	=	25,000
Less: Adjustment of excess money on application	=	5,000
		20,000
Less: Calls-in-Arrears by Sunder	=	2,000
Money received on allotment	=	18,000

Capital Reserve

Share Forfeiture	Cr.	1,500
Less: Share Forfeiture	Dr.	1,000
Balance in Share Forfeiture after reissue		500

Capital Reserve = Balance in Share Forfeiture after re-issue

= ₹500

Question 106:

Janta Ltd. issued applications for 5,00,000 equity shares of ₹10 each, at a premium of ₹4 per share. The amount was payable as follows:

On application ₹6 (including₹2 premium), on Allotment 6 (including₹2 premium) and Balance on first and final call.

Applications for 7,50,000 shares were received. Allotment was made to all the applicants on pro rata basis. Mohan to whom 1,000 shares were allotted did not pay allotment and call money. Vikram to whom 500 shares were allotted, did not pay the call money. These shares were forfeited and afterwards reissued @₹8 per share fully paid-up. Pass the necessary Journal entries.

Answer:

Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Bank A/c (7,50,000×6)	Dr.		45,00,000
	To Share Application A/c				45,00,000
	(Being share application money received)
	Share Application A/c	Dr.		45,00,000
	To Share Capital A/c (5,00,000×4)				20,00,000
	To Securities Premium Reserve A/c(5,00,000×2)				10,00,000
	To Share allotment A/c (2,50,000×6)				15,00,000
	(Being share application money transferred to share capital and Securities Premium Reserve and excess transferred to allotment)
	Share allotment A/c (5,00,000×6)	Dr.		30,00,000
	To Share Capital A/c (5,00,000×4)				20,00,000
	To Securities Premium Reserve A/c (5,00,000×2)				10,00,000
	(Being share allotment money transferred to share capital and Securities Premium Reserve)
	Bank A/c	Dr.		14,97,000
	To Share Allotment A/c				14,97,000
	(Being share allotment money received and except 1,000 shares)

	Or

	Bank A/c	Dr.		14,97,000
	Call-In-Arrears A/c (1,000×6-3000)	Dr.		3,000
	To Share Allotment A/c				15,00,000
	(Being share allotment money received and except 1,000 shares)
	Share Capital A/c (1,500×10)	Dr.		15,000
	Securities Premium Reserve A/c	Dr.		2,000
	(1,000×2)
	To Forfeited Shares A/c (4,000+7,000)				11,000
	To Call-In-Arrears A/c				6,000
	(Being 1,500 shares forfeited)

	Or

	Share Capital A/c (1,500×10)	Dr.		15,000
	Securities Premium Reserve A/c	Dr.		2,000
	(1,000×2)
	To Forfeited Shares A/c (4,000+7,000)				11,000
	To Share Allotment A/c				3,000
	To Share First and Final A/c				3,000
	(Being 1,500 shares forfeited)
	Bank A/c (1,500×8)	Dr.		12,000
	Forfeited Shares A/c (1,500×2)			3,000
	To Share Capital A/c (1,500×10)				15,000
	(Being 1500 shares forfeited reissued at ₹8 as fully paid-up)
	Forfeited Shares A/c	Dr.		8,000
	To Capital Reserve A/c				8,000
	(Being full amount Forfeited on 2,000 Shares reissued, transferred to Capital Reserve)
	(Being Prof it of 1500 shares transferred to capital reserve account)

Question 107:

Alok Ltd. invited applications for 1,00,000 Equity Shares of ₹10 each. The shares were issued at a premium of ₹5 per share. The amount was payable as follows:

On Application and Allotment ₹8 per share (including premium ₹3). Balance including premium on the First and Final Call.

Applications for 1,50,000 shares were received. Applications for 10,000 shares were rejected and pro rata allotment was made to the remaining applicants on the following basis:

(i) Applications for 80,000 shares were allotted 60,000 shares; and

(ii) Applications for 60,000 shares were allotted 40,000 shares.

Mohan, who belonged to the first category and was allotted 300 shares, failed to pay the first and final call money. Sohan, who belonged to the second category and was allotted 200 shares also failed to pay the call money, their shares were forfeited. The forfeited shares were reissued @ ₹12 per share fully paid-up.

Prepare Cash Book and pass necessary Journal entries.

Answer:

The amount was payable as follows:

Application and Allotment	₹8 (5+3 Premium)
First and Final Call	₹7 (5+2 Premium)

Books of Visa Ltd. Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Share Application and Allotment A/c	Dr.		12,00,000
	To Share Capital A/c (1,00,000×5)				5,00,000
	To Securities Premium Reserve A/c (1,00,000×3)				3,00,000
	To First and Final Call A/c				3,20,000
	To Bank A/c (10,000×8)				80,000
	(Share application of 10,000 shares transferred to Share Capital)
	Share First and Final Call A/c Dr.			7,00,000
	To Share Capital A/c (1,00,000×5)				5,00,000
	To Securities Premium Reserve A/c (1,00,000×2)				2,00,000
	Share Capital A/c Dr.			5,000
	Securities Premium Reserve A/c Dr.			1,000
	To First and Final Call A/c				1,900
	To Share Forfeited A/c				4,100
	(Being 500 share for Forfeited for non-payment of first and final call money)
	Share Forfeited A/c Dr.			4,100
	To Capital Reserve A/c				4,100
	(Being balance forfeited Share Account transfer to capital reserve found for the share issued)

Cash Book (Only Bank Column)
Dr.			Cr.
Particulars	Bank (₹)	Particulars	Bank (₹)
To Share Application and Allotment A/c	12,00,000	By Share Application and Allotment A/c	80,000
		By Balance C/d	15,04,100
To Share First Call A/c	3,78,100
To Share Capital A/c	5,000
To SPR A/c	1,000
	15,84,100		15,84,100

Working notes:

Applied Shares	Allotted Shares	Money received on Application @ ₹ 8 each	Excess money adjusted on Money transferred to Share Capital @ ₹ 8 each	Excess money adjusted on First and Final Call	Excess money refuned
80,000	60,000	6,40,000 (80,000×8)	4,80,000 (60,000×8)	1,60,000	-
60,000	40,000	4,80,000 (60,000×8)	3,20,000 (40,000×8)	1,60,000	-
10,000	Nil	80,000 (10,000×8)	Nil	-	80,000
1,50,000	1,00,000	12,00,000 (1,50,000×8)	8,00,000 (1.00,000×8)	3,20,000	80,000

Amount receive on First and Final Call

Due on First and Final Call	7,00,000
Less: Already received	(3,20,000)
Less: Mohan and Sohan did not pay on	(1,900)
	3,78,100

	Applied	Allotted
Mohan	400	300
Sohan	300	200
		500

	Application money received	Transferred to Share Capital @ ₹ 8 each	Excess money received for First and Final Call
Mohan	3,200 (400×8)	2,400 (300×8)	800
Sohan	2,400 (300×8)	1,600 (200×8)	800
		500 Shares allotted	1,600

Mohan’s and Sohan’s Amount due on first and final call (500×7)	3,500
Less: Excess money already received for First and Final Call	1,600
Not paid by Mohan and Sohan	1,900

Question 108:

Ruchi Ltd. issued for public subscription 40,000 Equity Shares of ₹10 each at a premium of ₹2 per share payable as:

On application		—		₹2 per share;
On allotment			—	₹5 per share (including premium),
On first call	—			₹2 per share,
On second and final call	—			₹3 per share.

Applications were received for 60,000 shares. Allotment was made on pro rata basis to the applicants for 48,000 shares, the remaining applications being refused. Money overpaid on application was utilised towards sums due on allotment. Ram to whom 1,600 shares were allotted failed to pay the allotment money and Shyam to whom 2,000 shares were allotted failed to pay the two calls. These shares were subsequently forfeited after the second and final call was made. All the forfeited shares were reissued as fully paid-up @ ₹8 per share.
Give necessary Journal entries for the above transactions.

Answer:

Issued capital 40,000 shares of ₹10 each at premium of ₹2

Applied ₹60,000 shares

*Allotment made as*:		*Payable as*:
Applied	Allotted	Application	₹2
48,000	40,000	Allotment	₹5	(3+2)
12,000	NIL	First Call	₹2
60,000	40,000	Second and Final Call	₹3
			₹12	(10+2) per share

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

	Bank A/c	Dr.		1,20,000
	To Equity Share Application A/c				1,20,000
	(Application money received for 60,000 shares at ₹2 each)

	Equity Share Application A/c	Dr.		1,20,000
	To Equity Share Capital A/c				80,000
	To Equity Share Allotment A/c				16,000
	To Bank A/c				24,000
	(Share application of 40,000 shares transferred to share capital, ₹16,000 adjusted on allotment and remaining ₹24,000 refunded)

	Equity Share Allotment A/c	Dr.		2,00,000
	To Equity Share Capital A/c				1,20,000
	To Securities Premium A/c				80,000
	(Share allotment due on 40,000 shares at ₹5 each including ₹2 premium)

	Bank A/c	Dr.		1,76,640
	To Equity Share Allotment A/c				1,76,640
	(Share allotment received on all shares except on 1,600 Shares held by Ram)

	Equity Share First Call A/c	Dr.		80,000
	To Equity Share Capital A/c				80,000
	(First call due on 40,000 shares at ₹2 each)

	Bank A/c	Dr.		72,800
	To Equity Share First Call A/c				72,800
	(First call received on 36,400 shares and holders of 3,600 failed to pay it)

	Equity Share Second and Final Call A/c	Dr.		1,20,000
	To Equity Share Capital A/c				1,20,000
	(Second and final call due on 40,000 shares at ₹3 each)

	Bank A/c	Dr.		1,09,200
	To Equity Share second and Final Call A/c				1,09,200
	(Second and final call received on 36,400 shares and holders of 3,600 shares failed to pay it)

	Equity Share Capital A/c	Dr.		16,000
	Securities Premium A/c	Dr.		3,200
	To Share Forfeiture A/c				3,840
	To Equity Share Allotment A/c				7,360
	To Equity Share first Call A/c				3,200
	To Equity Share Second and Final Call A/c				4,800
	(1600 shares held by Ram forfeited for non-payment amount due including premium)

	Equity Share Capital A/c	Dr.		20,000
	To Equity Share Forfeiture A/c				10,000
	To Equity Share First Call A/c				4,000
	To Equity Share Second and Final Call A/c				6,000
	(2,000 shares held by Shyam forfeited for non-payment of amount due)

	Bank A/c	Dr.		28,800
	Share Forfeiture A/c	Dr.		7,200
	To Equity Share Capital A/c				36,000
	(3,600 shares of ₹10 each re-issued at ₹8 per share fully paid-up)

	Share Forfeiture A/c	Dr.		6,640
	To Capital Reserve A/c				6,640
	(Balance in Share Forfeiture transferred to Capital Reserve)

Working Notes:

Ram’s shares

Number of shares applied by Ram =48,000/40,000×1,600=1,920 Shares

Money received on Application (1,920 shares × ₹2)	=	₹3,840
*Less*: Application money transferred to Share Capital (1,600 shares × ₹2)	=	₹3,200
Excess money on Application	=	₹640

Share Allotment due (1,600 shares × ₹5)	₹	8,000
*Less*: Excess money on Application	₹	640
Calls-in-Arrears on Allotment	₹	7,360

Share Allotment

Share Allotment due (40,000 shares × ₹5)	2,00,000
Less: Excess money on Application	16,000
	1,84,000
Less: Calls-in-Arrears by Ram	7,360
Money received on Allotment	1,76,640

Share First Call

Share First Call due (40,000 shares × ₹2)	80,000
Less: Calls-in-Arrears by Ram and Shyam (3,600 shares ×₹2)	7,200
Money received on First Call	72,800

Share Final Call

Share Final Call due 40,000 Shares × ₹3

1,20,000

Less: Calls-in-Arrears by Ram and Shyam

(3,600 shares × ₹3)

10,800

Money received on Second and Final Call

1,09,200

Capital Reserve

Share Forfeiture on Ram’s shares (money received on application)	3,840
Share Forfeiture on Shyam’s shares (2,000 shares × ₹5)	10,000
	13,840	Cr.
*Less*: Share Forfeiture	7,200	Dr.
Capital Reserve	6,640

Ts Grewal Solution 2025-2026

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Class 12 / Volume – 2

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Chapter 9- Company Accounts- Accounting for Share Capital