12th | Accounting for Share Capital | Question No. 53 To 56 | Ts Grewal Solution 2025-2026

Question 53:

Chand Ltd. invited applications for issuing 1,00,000 equity shares of ₹10 each at a premium of ₹2 per share. The amount per share was payable as follows: ₹4 (including premium) on application, ₹5 on allotment and balance on first and final call. Applications were received for 1,80,000 shares of which applications for 30,000 shares were rejected and remaining applicants were allotted shares on pro rata basis. Mansi holding 5,000 shares failed to pay first and final call money and her shares were forfeited.

Pass necessary Journal entries for the above transactions in the books of the company. (CBSE 2024)

Answer:

On Application:	₹ 4 per share (including premium)
On Allotment:	₹ 5 per share
On first and final Call:	₹ 3 per share

Books of Chand Ltd. Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Bank A/c	Dr.		7,20,000
	To Share Application A/c				7,20,000
	(Share application money received for 1,80,000 shares at ₹ 4 each)
	Share Application A/c	Dr.		7,20,000
	To Share Capital A/c (1,00,000×2)				2,00,000
	To Securities Premium Reserve A/c				2,00,000
	To Share Allotment A/c				2,00,000
	To Bank A/c (30,000×4)				1,20,000
	(Share application of 1,00,000 shares transferred to Share Capital out of share applied 1,50,000 shares, and excess application money adjusted on allotment and amount on 30,000 shares returned)
	Share Allotment A/c Dr.			5,00,000
	To Share Capital A/c				5,00,000
	(Share allotment due on 1,00,000 shares at ₹ 5 each)
	Bank A/c Dr.			3,00,000
	To Share Allotment A/c				3,00,000
	(Share allotment money received)
	Share First and Final Call A/c	Dr.		3,00,000
	To Share Capital A/c				3,00,000
	(First and final call due on 1,00,000 shares at ₹ 3 each)
	Bank A/c	Dr.		2,85,000
	To Share First and Final Call A/c				2,85,000
	(Share first and final call money received except Mansi holding 5,000 shares)
	Share Capital A/c Dr.			50,000
	To Share forfeited A/c				35,000
	To Share First and Final Call A/c (Being 5,000 shares forfeited for non-payment of First and Final Call)				15,000

Forfeiture of Shares which were Issued at Premium

Question 54:

Ratan Ltd. forfeited 3,000 shares of ₹10 each (issued at ₹2 premium) for non-payment of first call of ₹2 per share. Final call of ₹3 per share was not yet made. Out of these, 2,000 shares we₹10 per share as fully paid. Pass entries for forfeiture and reissue of shares. (CBSE Sample Paper 2023)

Answer:

Books of Ratan Ltd. Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Share capital A/c (3,000×7)	Dr.		21,000
	To Share forfeited A/c (3,000×5)				15,000
	To Share first call A/c (3,000×2)				6,000
	(Being share forfeited for non-payment)
	Bank A/c (2,000×10)	Dr.		20,000
	To Share capital A/c				20,000
	(Being 2,000 shares reissued)
	Share forfeited A/c	Dr.		10,000
	To Capital Reserve A/c				10,000
	(Being balance in Share forfeited account of reissued share transferred)

Working notes:

Amount paid-up 18,000

Amount to be transferred to capital reserve = 18,000÷5000×3,000

Question 55:

Ajanta Ltd. issued a prospectus inviting applications for issuing 5,00,000 equity shares of ₹10 each issued at a premium of 10%. The amount was payable as follows:

On Application -₹3 per share

On Allotment (including premium) - ₹5 per share

On First and Final Call - ₹3 per share

Applications were received for 6,00,000 shares and pro rata allotment was made to all applicants. Excess money received on application was adjusted towards sums due on allotment. All amounts were duly received except from Sumit, who was the holder of 1,000 shares, and failed to pay the allotment and first and final call. His shares were forfeited.

Pass Journal entries for the above transactions in the books of Ajanta Ltd. Open Calls-in-Arrears Account wherever necessary. (CBSE 2023)

Answer:

Issued and Subscribed Capital 5,00,000 shares of ₹10 each at ₹1 Premium
Payable as:

₹	3	On application
₹	5	On allotment (including 5 Premium)
₹	3	On first call
	11

Books of Ajanta Ltd. Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)

	Bank A/c (6,00,000×3)	Dr.		18,00,000
	To Share Application A/c				18,00,000
	(Share application money received for 6,00,000 shares at₹3 per share)

	Share Application A/c (6,00,000×6)	Dr.		18,00,000
	To Share Capital A/c (5,00,000×3)				15,00,000
	To Share Allotment A/c				3,00,000
	(Share application Money transferred to Share Capital and excess application money transferred To Share Allotment Account)

	Share Allotment A/c (5,00,000×5)	Dr.		25,00,000
	To Share Capital A/c (5,00,000×4)				20,00,000
	To Securities Premium Reserves A/c (5,00,000×1)				5,00,000
	(Share allotment due on 5,00,000 shares at₹4 with premium of ₹1 per share)

	Bank A/c	Dr.		21,95,000
	Calls-in-Arrears A/c (1,000×5) Dr.			5,000
	To Share Allotment A/c				22,00,000
	(Share allotment money received except 1,000 shares)
	Share First Call A/c (5,00,000×3)	Dr.		15,00,000
	To Share Capital A/c				15,00,000
	(Share first call due on 5,00,000 shares at₹3 per share)
	Bank A/c	Dr.		14,97,000
	Calls-in-Arrears A/c (1,000×3) Dr.			3,000
	To Share First and Final call A/c				15,00,000
	(Share first call received on 10,000 shares at₹3per share except 1,000 shares)
	Share Capital A/c (1,000×10)	Dr.		10,000
	Securities Premium Reserves A/c (1,000×1)			1,000
	To Share Forfeited A/c (1,000×3)				3,600
	To Calls-in-Arrears A/c (1,000×8)				7,400
	(Being shares forfeited due non-payment of allotment and first call)

\Working note:

Sumit applied for 1,000×6,00,000÷5,00,000=1,200 shares

Payment received from Sumit on application = 1,200×3=3,600

Question 56:

Ankit Ltd. issued 20,000 equity shares of 10 each at a premium of ₹2 per share, payable as:

On Application	:	₹3
On Allotment	:	₹5 (including premium)
On First Call	:	₹2
On Second and Final Call	:	₹2

Vijay was allotted 500 shares. Pass the necessary Journal entries relating to the forfeiture of shares in following cases.

Case I	Vijay did not pay allotment money and his shares were immediately forfeited.
Case II	Vijay did not pay allotment and first call, his shares were forfeited after first call.
Case III	Vijay failed to pay first call and his shares were forfeited immediately.
Case IV	Vijay failed to pay both the calls and his shares were forfeited.

Answer:

Case I:

In the books of Ankit Ltd. Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Share Capital A/c (500 × 6)	Dr.		3,000
	Securities Premium Reserve A/c (500 × 2)	Dr.		1,000
	To Share Forfeiture A/c (500 × 3)				1,500
	To Share Allotment A/c (500 × 5)				2,500
	(Being 500 shares forfeited for non-payment of allotment money)

Case II:

In the books of Ankit Ltd. Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Share Capital A/c (500 × 8)	Dr.		4,000
	Securities Premium Reserve A/c (500 × 2)	Dr.		1,000
	To Share Forfeiture A/c (500 × 3)				1,500
	To Share Allotment A/c (500 × 5)				2,500
	To Share First Call A/c (500 × 2)				1,000
	(Being 500 shares forfeited for non-payment of allotment and first call)

Case III:

In the books of Ankit Ltd. Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Share Capital A/c (500 × 8)	Dr.		4,000
	To Share Forfeiture A/c (500 × 6)				3,000
	To Share First Call A/c (500 × 2)				1,000
	(Being 500 shares forfeited for non-payment of first call)

Case IV:

In the books of Ankit Ltd. Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Share Capital A/c (500 × 10)	Dr.		5,000
	To Share Forfeiture A/c (500 × 6)				3,000
	To Share First Call A/c (500 × 2)				1,000
	To Share Second and Final Call (500 × 2)				1,000
	(Being 500 shares forfeited for non-payment of first and second call)

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