12th | Accounting for Share Capital | Question No. 21 To 24 | Ts Grewal Solution 2025-2026

Question 21:

Sangam Ltd. invited applications for 20,000 Equity Shares of ₹100 each issued at par. The amount was payable on application. The issue was oversubscribed by 5,000 shares and allotment was made on pro rata basis. Pass necessary Journal entries.

Answer:

In the books of Sangam Ltd. Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Bank A/c (25,000 × 100)	Dr.		25,00,000
	To Share Application and Allotment A/c (25,000 × 100)				25,00,000
	(Being application money received on 25,000 equity shares)

	Share Application and Allotment A/c	Dr.		25,00,000
	To Share Capital A/c (20,000 × 100)				20,00,000
	To Bank A/c (5,000 × 100)				5,00,000
	(Being share application and allotment money adjusted for 10,000
	shares and balance money refunded)

Note: Since the entire amount is receivable on application so the excess money on 2,000 shares has been refunded and allotment is made on a pro-rata basis to 12,000 shareholders.

Question 22:

Citizen Watches Ltd. invited applications for 50,000 shares of ₹10 each payable ₹3 on application , ₹4 on allotment and balance on first and final call . Applications were received for 60,000 shares . Applications were accepted for 50,000 shares and remaining applications were rejected . All calls were made and received except First and Final call on 500 shares .

Pass the journal entries in the books of Citizen Watches Ltd .

Answer:

Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Bank A/c (60,000×3)	Dr.		1,80,000
	To Share Application A/c				1,80,000
	(Received application money on 60,000 shares)

	Share Application A/c	Dr.		1,80,000
	To Share Capital A/c (50,000×3)				1,50,000
	To Bank A/c (10,000×3)				30,000
	(Transfer of application money to Share Capital)

	Share Allotment A/c (50,000×4)	Dr.		2,00,000
	To Share Capital A/c				2,00,000
	(Allotment due on 50,000 shares )

	Bank A/c	Dr.		2,00,000
	To Share Allotment A/c				2,00,000
	(Allotment received)

	Share First and Final Call A/c (50,000×3)	Dr.		1,50,000
	To Share Capital A/c				1,50,000
	(Call money due on 50,000 shares)

	Bank A/c (49,500×3)	Dr.		1,48,500
	To Share First and Final Call A/c				1,48,500
	(Received call money on 49,500 shares)

Question 23:

Tiny Toys Ltd. issued ₹10,00,000 shares of ₹100 each at a premium of ₹20 for subscription payable as:

₹10 per share on application,
₹40 per share and ₹10 premium on allotment, and
₹50 per share and ₹10 premium on final payment.

Over-payments on application were to be applied towards amount due on allotment and over-payments on application exceeding amount due on allotment was to be returned. Issue was oversubscribed to the extent of 13,000 shares. Applicants for 11,000 shares were allotted only 10,000 shares and applicants for 2,000 shares were sent letters of regret. All the money due on allotment and final call was duly received.
Pass necessary entries in the company's books to record the above transactions. Also, prepare company's Balance Sheet on completion of the above transactions.

Answer:

Amount payable as:

Application	₹	10
Allotment	₹	50	(40 + 10)
First and Final Call	₹	60	(50 + 10)
		120	(100 + 20)

Books of Tiny Toys Limited Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)

	Bank A/c	Dr.		1,30,000
	To Share Application A/c				1,30,000
	(Share application money received for 23,000 shares at ₹10 each)

	Share Application A/c	Dr.		1,30,000
	To Share Capital A/c				1,00,000
	To Share Allotment A/c				10,000
	To Bank A/c				20,000
	(Share application of 10,000 shares transferred to Share Capital, ₹10,000 adjusted on allotment and 2,000 remaining amount returned and refunded)

	Share Allotment A/c	Dr.		5,00,000
	To Share Capital A/c				4,00,000
	To Securities Premium A/c				1,00,000
	(Share allotment due on 10,000 shares at ₹50 each including ₹10 premium)

	Bank A/c	Dr.		4,90,000
	To Share Allotment A/c				4,90,000
	(Share allotment money received)

	Share First and Final Call A/c	Dr.		6,00,000
	(10,000×60)
	To Share Capital A/c (10,000×50)				5,00,000
	To Securities Premium A/c (10,000×10)				1,00,000
	(First and final call due on 10,000 shares at ₹60 each including ₹10 premium)

	Bank A/c	Dr.		6,00,000
	To Share First and Final Call A/c				6,00,000
	(Share first and final call money received)

Posting in the Company's Balance Sheet

Tiny ToysLimited
Balance Sheet
Particulars	Note No.	(₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital	1	10,00,000
b. Reserves and Surplus	2	2,00,000
2. Non-Current Liabilities
3. Current Liabilities
Total		12,00,000
II. Assets
1.Non-Current Assets
2.Current Assets
a. Cash and Cash Equivalents	3	12,00,000
Total		12,00,000

NOTES TO ACCOUNTS


Note No.	Particulars	(₹)
1	Share Capital
	Authorised Share Capital
	…… shares of ₹100 each	-
	Issued Share Capital
	10,000 shares of ₹100 each	10,00,000
	Subscribed, Called up and Paid up Share Capital
	10,000 shares of ₹100 each	10,00,000

2	Reserves and Surplus
	Securities Premium	2,00,000

3	Cash and Cash Equivalents
	Cash at Bank	12,00,000

Working Notes:

No. of Shares Applied	No. of Shares Allotted	Money received on Application @ ₹10 each	Money transferred to Share Capital @ ₹10 each	Excess	Allotment due @ ₹50 each	Excess money adjusted on Allotment	Bank (Refund)
11,000	10,000	1,10,000	1,00,000	10,000	50,000	10,000	–
2,000	NIL	20,000	–	20,000 (return)			20,000
				–		–	–
13,000	10,000	1,30,000 (13,000×10)	1,00,000 (10,000×10)			10,000	20,000

Share Allotment due (10,000 share × ₹50)	5,00,000
Less: Excess application money adjusted on allotment	50,000
Money received on Allotment	4,50,000

Question 24:

Sony Media Ltd. issued 50,000 shares of ₹10 each payable ₹3 on application , ₹4 on allotment and balance on first and final call . Applications were received for 1,00,000 shares and allotment was made as follows :
(i) Applicants for 60,000 shares were allotted 30,000 shares,
(ii) Applicants for 40,000 shares were allotted 20,000 shares,
Anupam to whom 1,000 shares were allotted from category
(i) failed to pay the allotment money.
Pass journal entries up to allotment.

Answer:

Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Bank A/c (1,00,000 × 3)	Dr.		3,00,000
	To Share Application A/c				3,00,000
	(Received application money on 1,00,000 shares)

	Share Application A/c	Dr.		3,00,000
	To Share Capital A/c (50,000 × 3)				1,50,000
	To Share Allotment A/c				1,50,000
	(Transfer of application money to Share Capital)

	Share Allotment A/c (50,000 × 4)	Dr.		2,00,000
	To Share Capital A/c				2,00,000
	Allotment due on 50,000 shares)

	Bank A/c (W.N. 1)	Dr.		49,000
	To Share Allotment A/c				49,000
	(Allotment money received after adjustment of excess on application and arrears)

Working Notes:

1) Computation of amount received on allotment:

Allotment due (50,000 × 4)	=	₹. 2,00,000
Less: Amount received on application in excess (on 50,000 shares @ ₹. 3 each)	=	₹. 1,50,000
		₹. 50,000
Less: Amount due but not received on shares of Anupam		1,000
		₹. 49,000

2) Calculation of Amount not Received on the shares of Anupam

Shares allotted to Anupam =1,000

Shares applied by Anupam =1,000×60,000/30,000=2,000

Amount due on allotment of Anupam's Share (4 × 1,000)	=	4,000
Less: Excess received on application (3 × 2,000 – 3 × 1,000)	=	3,000

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