12th | Accounting for Share Capital | Question No. 89 To 92 | Ts Grewal Solution 2025-2026

Question 89:

Pass necessary journal entries in the books of the company for the following transactions:
Vishesh Ltd. forfeited 1,000 Equity Shares of ₹10 each issued at a premium of ₹2 per share for non-payment of allotment money of ₹5 per share including premium. The final call of ₹2 per share was not yet called on these shares. Of the forfeited shares 800 shares were reissued at ₹12 per share as fully paid-up.
The remaining shares were reissued at ₹11 per share fully paid-up. (CBSE 2013 C)

Answer:

Journal In the books of Vishesh Ltd.
Date	Particulars		L.F.	Debit ₹	Credit ₹
	Equity Share Capital A/c (8×1,000)	Dr.		8,000
	Securities Premium A/c (2×1,000)	Dr.		2,000
	To Share Forfeiture A/c				5,000
	To Calls-in-Arrears				5,000
	(1,000 shares of ₹10 each issued at premium of ₹2 forfeited for non-payment of allotment money of ₹5 including premium, final call of ₹2 not yet made)

	Bank A/c (12×800)	Dr.		9,600
	To Share Capital A/c				8,000
	To Securities Premium A/c				1,600
	(800 shares reissued at ₹12 fully paid up)

	Bank A/c (11×200)	Dr.		2,200
	To Share Capital A/c				2,000
	To Securities Premium A/c				200
	(200 shares reissued at ₹11 fully paid up)

	Share Forfeiture A/c	Dr.		5,000
	To Capital Reserve A/c				5,000
	(Prof it on reissue transferred to capital reserve)

Question 90:

Gaurav applied for 5,000 shares of ₹10 each at a premium of 2.50 per share. But he was allotted only 2,500 shares on pro rata basis . After having paid ₹3 per share on application, he did not pay allotment money of ₹4.50 per share (including premium) and on his subsequent failure to pay the first call of ₹2 per share, his shares were forfeited. These shares were reissued at the rate of ₹8 per share credited as fully paid .
Pass journal entries to record the forfeiture and reissue of shares.

Answer:

Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Equity Share Capital A/c (2,500×7)	Dr.		17,500
	Security Premium Reserve A/c	Dr.		3,750
	To Equity Share Allotment A/c				3,750
	To Equity Share First Call A/c (2,500×2)				5,000
	To Share Forfeited A/c				12,500
	(2,500 shares forfeited)

	Bank A/c (2,500×8)	Dr.		20,000
	Share Forfeited A/c (2,500×2)	Dr.		5,000
	To Equity Share Capital A/c (2,500×10)				25,000
	(Share reissued @₹8 per share fully paid-up)

	Share Forfeited A/c (12,500 – 5,000)	Dr.		7,500
	To Capital Reserve A/c				7,500
	(Prof it on reissue transferred to Capital Reserve)

Working Notes:

WN 1: Calculation of Amount unpaid on Allotment

Amount received on application (5,000×3) = 15,000

Less: Amount adjusted on application (2,500×3) = 7,500

Excess amount received on application = 7,500

Amount due on allotment (2,500×4.5) = 11,250

Amount unpaid on allotment = 3,750 (11,250 – 7,500)

Note:

₹7,500 received on application will be transferred to allotment, but first of all we have to transfer such amount to Capital A/c and rest would be transferred to Securities Premium A/c. Capital on allotment is ₹5,000 (2,500×2) that is fully received and balance amount of advance ₹2,500 will be transferred to Securities Premium A/c. So, amount of premium unpaid is ₹3,750 (2,500×2.5 –2,500).

Question 91:

Amal had applied for 7,000 shares of ₹10 each at a premium of ₹5 per share. He was allotted 4,000 shareson pro rata basis. After having paid ₹3 per share on application, he did not pay allotment money of ₹7 per share (including premium) and on his subsequent failure to pay the first call of ₹3 per share, hisshares were forfeited. Calls not received were transferred to Calls-in-Arrears Account. These shares werereissued at the rate of 8 per share credited as fully paid.

Pass Journal entries to record the forfeiture and reissue of shares.

Answer:

Aman Applied Capital 7,000 shares of ₹10 each

Allotted 4,000 shares
Payable as:

₹	3	On application
₹	7	On allotment (With ₹5 Premium)
₹	3	On first and final call
₹	2	On first and final call
	15

Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Share Capital A/c (4,000×8)	Dr.		32,000
	To Forfeited Shares A/c				21,000
	To Calls-In-Arrears A/c (4,000×3)				11,000
	(Being share forfeited for Non Payment of allotment and First Call of 4,000 shares)
	Bank A/c (4,000×8)	Dr.		32,000
	Forfeited Shares A/c (4,000×2)			8,000
	To Share Capital A/c (4,000×10)				40,000
	(Being 4,000 shares forfeited reissued at the rate of ₹8 per share credited as fully paid)
	Forfeited Shares A/c	Dr.		13,000
	To Capital Reserve A/c				13,000
	(Being full amount Forfeited on 2,000 Shares reissued, transferred to Capital Reserve)

Question 92:

Pass necessary Journal entries for forfeiture and reissue of shares in the following cases:

(i) Neon Ltd. forfeited 2,000 shares of ₹10 each issued at a premium of ₹2 per share for non-payment of allotment money of ₹5 per share (including premium). The first and final call of ₹2 per share was not yet made. Out of these, 1,500 shares were reissued at ₹7 per share, ₹8 paid-up.

(ii) Mamta Ltd. forfeited 3,000 shares of ₹10 each on which the first call of ₹3 per share was not received.

The second and final call of ₹1 per share was not yet called. Out of these, 2,000 shares were reissued at ₹9 per share, ₹9 paid-up.

(CBSE 2024)

Answer:

Case 1:

Application	5
Allotment	₹5 (₹3+₹2)
1^st and Final call	₹2

	Books of Neon Ltd. Journal
Date		Particulars		L.F.	Debit (₹)	Credit (₹)
		Share Capital A/c (2,000×8)	Dr.		16,000
		Securities Premium Reserves A/c (2,000×2)	Dr.		4,000
		To Share forfeited A/c (2,000×5)				10,000
		To Share Allotment A/c (2,000×5)				10,000
		(Being 2,000 shares forfeited for non-allotment due on at ₹ 5 each including premium)
		Bank A/c (1,500×7)	Dr.		10,500
		Share forfeited A/c (1,500×1)	Dr.		1,500
		To Share Capital A/c (1,500×8)				12,000
		(Being 1,500 forfeited shares were reissued @ ₹7 per share for ₹8)
		Share forfeited A/c	Dr.		6,000
		To Capital Reserve A/c				6,000
		( Being balance in the forfeited amount of 1,500 shares transfer to capital reserve account)

Amount to be transferred to Capital Reserves = 10,000×1,500÷2,000= 7,500

7,500-1,500 (discount on re-issue)=6,000

Case 2:

Application and Allotment	₹6
First Call	₹3
1^st and Final call	₹1

	Books of Neon Ltd. Journal
Date		Particulars		L.F.	Debit (₹)	Credit (₹)
		Share Capital A/c (3,000×9)	Dr.		27,000
		To Share forfeited A/c (3,000×6)				18,000
		To Share Allotment A/c (3,000×3)				9,000
		(Being 3,000 shares forfeited for non-payment of First call due on at ₹ 3)
		Bank A/c (2,000×9)	Dr.		18,000
		To Share Capital A/c (2,000×9)				18,000
		(Being 2,000 forfeited shares were reissued @ ₹9 per share for ₹9)
		Share forfeited A/c	Dr.		12,000
		To Capital Reserve A/c				12,000
		( Being balance in the forfeited amount of 1,500 shares transfer to capital reserve account)

Amount to be transferred to Capital Reserves = 18,000×2,000÷3,000= 12,000

12,000- Nil (discount on re-issue) =12,000

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