12th | Accounting for Share Capital | Question No. 77 To 80 | Ts Grewal Solution 2025-2026

Question 77:

Slow & Steady Ltd. invited applications for 10,000 Equity Shares of ₹10 each for public subscription. The amount of these shares was payable as:
On application ₹1 per share, on allotment ₹2 per share, on first call ₹3 per share and on second and final call ₹4 per share.
All sums payable on application, allotment and calls were duly received with the following exceptions:
(i) A, who held 200 shares, failed to pay the money on allotments and calls.
(ii) B, to whom 150 shares were allotted, failed to pay the money on first call and final call.
(iii) C, who held 50 shares, did not pay the amount of second and final call.
The shares of A, B and C were forfeited and were subsequently reissued for cash as fully paid-up at a discount of 5%.
Pass necessary Journal entries to record these transactions in the books of X Ltd.

Answer:

Issued and Applied 10,000 Shares of ₹10 each

					A		B		C		Paid-up Shares
Application	₹	1	(10,000							=	10,000)
Allotment	₹	2	(10,000	–	200					=	9,800)
First Call	₹	3	(10,000	–	200	–	150			=	9,650)
Second and Final Call	₹	4	(10,000	–	200	–	150	–	50	=	9,600)
		10

Books of Slow and Steady Limited Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)

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

	Equity Share Application A/c	Dr.		10,000
	To Equity Share Capital A/c				10,000
	(Share application money transferred to Share Capital)

	Equity Share Allotment A/c	Dr.		20,000
	To Equity Share Capital A/c				20,000
	(Share allotment due on 10,000 shares at ₹2 each)

	Bank A/c	Dr.		19,600
	Calls-In-Arrears A/c	Dr.		400
	To Equity Share Allotment A/c				20,000
	(Share allotment of ₹2 per share received on 9,800 shares and holder of 200 failed to pay to it)

	Equity Share First Call A/c	Dr.		30,000
	To Equity Share Capital				30,000
	(Share first call due on 10,000 shares at ₹3 each)

	Bank A/c	Dr.		28,950
	Calls-In-Arrears A/c	Dr.		1,050
	To Equity Shares First Call A/c				30,000
	(Share first call received on 9,650 shares and holders of 350 shares failed to pay it)

	Equity Share Final Call A/c	Dr.		40,000
	To Equity Share Capital A/c				40,000
	(Share final call due on 10,000 shares at ₹4 each)

	Bank A/c	Dr.		38,400
	Calls-In-Arrears A/c	Dr.		1,600
	To Equity Share Final Call A/c				40,000
	(Holders of 9,600 shares paid final call and holders of 400 shares failed to pay it)

	Equity Share Capital A/c	Dr.		2,000
	To Share Forfeiture A/c (200 × 1)				200
	To Calls-In-Arrears A/c (200 × 9)				1,800
	(200 shares held by A on which application money ₹1 was received, forfeited)

	Equity Share Capital A/c	Dr.		1,500
	To Share Forfeiture A/c (150 × 3)				450
	To Calls-In-Arrears A/c (150 × 7)				1,050
	(150 shares of ₹10 each held by B forfeited for the non-payment of two calls ₹each)

	Equity Share Capital A/c	Dr.		500
	To Share Forfeiture A/c (50 × 6)				300
	To Calls-in-Arrears A/c (50 × 4)				200
	(50 shares of ₹10 each held by C forfeited for the non-payment of final call ₹4 each)

	Bank A/c (400 × 9.5)	Dr.		3,800
	Share Forfeiture A/c (400 × .5)	Dr.		200
	To Equity Share Capital A/c				4,000
	(400 shares of ₹10 each re-issued at ₹9.5 per share as fully paid-up)

	Share Forfeiture A/c	Dr.		750
	To Capital Reserve A/c				750
	(Balance in Share Forfeiture Account after re-issue transferred to Capital Reserve)

Working Note:

Share Forfeiture of 100 shares held by A	₹	200	Cr.
Share Forfeiture of 200 shares held by B	₹	450	Cr.
Share Forfeiture of 300 shares held by C	₹	300	Cr.
Total Share Forfeiture credit (at the time of cancellation of shares)	₹	950

Calculation of Capital Reserve

Total Share Forfeiture (at the time of cancellation of shares) = ₹950

Less: Total Share Forfeiture (at the time of re-issue of shares) = ₹(200)

Capital Reserve = ₹750

Question 78:

'Venus Ltd was registered with an authorised capital of ₹40,00,000 divided into 4,00,000 equity shares of ₹10 each. 70,000 of these shares were issued as fully paid to 'M/s. Star Ltd! for building purchased from them. 2,00,000 shares were issued to the public and the amounts were payable as follows:

On Application	- ₹3 per share
On Allotment	- ₹2 per share
On First Call	- ₹2 per share
On Second and Final Call	- ₹3 per share

The amounts received on these shares were as follows:

On 1,00,000 shares	- Full amount called
On 60,000 shares	- ₹7 per share
On 30,000 shares	- ₹5 per share
On 10,000 shares	- ₹3 per share

The directors forfeited 10,000 shares on which only ₹3 per share were received. These shares were reissued at ₹12 per share fully paid. Pass necessary Journal entries for the above transactions in the books of Venus Ltd. (CBSE 2019 c)

Answer:

Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Building A/c (70,000 × 10)	Dr.		7,00,000
	To M/s Star Ltd. A/c				7,00,000
	(Being building bought)

	M/s Star Ltd. A/c	Dr.		7,00,000
	To Equity Share Capital A/c				7,00,000
	(Being purchase consideration paid in equity share of ₹10 each)

	Bank A/c (2,00,000×3)	Dr.		6,00,000
	To Equity Share application A/c				6,00,000
	(Being share application money received)




	Equity Share application A/c	Dr.		6,00,000
	To Equity Share Capital A/c				6,00,000
	(Being share application money transferred to share capital )

	Equity Share Allotment A/c (2,00,000 × 2)	Dr.		4,00,000
	To Equity Share Capital A/c				4,00,000
	(Allotment money due)

	Bank A/c	Dr.		4,00,000
	To Equity Share Allotment A/c				4,00,000
	(Allotment money received)

	Equity Share First Call A/c (2,00,000 × 2)	Dr.		4,00,000
	To Equity Share Capital A/c				4,00,000
	(Call money due)

	Bank A/c (1,60,000 × 2)	Dr.		3,20,000
	To Equity Share First Call A/c				3,20,000
	(Call money received)

	Equity Share Second & final Call A/c (2,00,000 × 3)	Dr.		6,00,000
	To Equity Share Capital A/c				6,00,000
	(Call money due)

	Bank A/c (1,00,000 × 3)	Dr.		3,00,000
	To Equity Share Second & final Call A/c				3,00,000
	(Call money received except 1,00,000 shares)

	Equity Share Capital A/c (10,000×10)	Dr.		1,00,000
	To Equity Share Allotment A/c (10,000×2)				20,000
	To Equity Share First Call A/c (10,000×2)				20,000

	To Equity Share Second & final Call A/c (10,000×3)				30,000
	To Equity share forfeiture A/c (10,000×3)				30,000
	(Being 10,000 share forfeited)



	Bank A/c	Dr,		1,20,000
	To Equity Share Capital A/c To Securities premium reserve a/c				1,00,000 20,000
	(Being 10,000 forfeited shares, re-issued @ ₹12 per share fully paid-up)


	Equity share forfeiture A/c To Capital Reserve A/c	Dr.		30,000	30,000
	(Being balance of share forfeiture transferred to Capital reserve a/c)

Question 79:

Kwality Hospitality Ltd. incorporated with authorised capital of ₹10,00,000, 1,00,000 equity shares of ₹10 each, issued 50,000 equity shares for subscription payable ₹4 on application,₹3 on allotment and balance as first and final call. The shares were subscribed, and due amounts were received except first and final call on 4,000 shares. These shares were forfeited. Later, half the shares were reissued as fully paid-up and ₹4,000 were transferred to Capital Reserve.

Pass the Journal entry for reissue of shares.

Answer:

Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Bank A/c (50,000×4)	Dr.		2,00,000
	To Share Application A/c				2,00,000
	(Being share application money received)
	Share Application A/c	Dr.		2,00,000
	To Share Capital A/c				2,00,000
	(Being share application money transferred to share capital )
	Share Allotment A/c (50,000×3)	Dr.		1,50,000
	To Share Capital A/c				1,50,000
	(Being allotment due)
	Bank A/c	Dr.		1,50,000
	To Share Allotment A/c				1,50,000
	(Being share allotment money received)
	Share First and Final A/c (50,000×3)	Dr.		1,50,000
	To Share Capital A/c				1,50,000
	(Being first and final call due)
	Bank A/c (46,000×3)	Dr.		1,38,000
	Calls-In-Arrears A/c (4,000×3)			12,000
	To Share First and Final A/c (50,000×3)				1,50,000
	(Being share First and Final money received except 4,000 shares)
	Share Capital A/c (4,000×10)	Dr.		40,000
	To Forfeited Shares A/c (4,000×7)				28,000
	To Calls-In-Arrears A/c (4,000×3)				12,000
	(Being share forfeited for First and Final Calls of 4,000 shares)
	Bank A/c (2,000×5)	Dr.		10,000
	Forfeited Shares A/c (2,000×5)	Dr.		10,000
	To Share Capital A/c (2,000×10)				20,000
	(Being 2,000 shares forfeited reissued as fully paid-up)
	Forfeited Shares A/c	Dr.		4,000
	To Capital Reserve A/c				4,000
	(being balance in Forfeited Shares account of reissued shares transferred to Capital Reserve 28,000×2,000÷4,000= 14,000-10,000=4,000)

Question 80:

Park Hospitality Ltd. incorporated with authorised capital of ₹15,00,000, 1,50,000 equity shares of ₹10 each, issued 1,00,000 equity shares for subscription payable ₹4 on application, ₹3 on allotment and balance as first and final call. The shares were subscribed, and due amounts were received except first and final call on 4,000 shares held by Pawan. Rakesh holding 2,000 shares paid call on his shares along with allotment money. Shares of Pawan were forfeited. Later, half the shares were reissued as fully paid-up and ₹4,000 were transferred to Capital Reserve. Pass the Journal entry for reissue of shares.

Answer:

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

₹	4	on application
₹	3	on allotment
₹	3	on first and final call
	10

Answer:

Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Bank A/c (1,00,000×4)	Dr.		10,00,000
	To Share Application A/c				10,00,000
	(Being share application money received)
	Share Application A/c	Dr.		10,00,000
	To Share Capital A/c				10,00,000
	(Being share application money transferred to share capital )
	Share Allotment A/c (1,00,000×3)	Dr.		3,00,000
	To Share Capital A/c				3,00,000
	(Being allotment due)
	Bank A/c	Dr.		3,06,000
	To Share Allotment A/c				3,00,000
	To Share First and Final A/c (2,000×3)				6,000
	(Being share allotment money received and along with, Rakesh holding 2,000 shares for First and Final call)
	Share First and Final A/c (1,00,000×3)	Dr.		3,00,000
	To Share Capital A/c				3,00,000
	(Being first and final call due)
	Bank A/c (94,000×3)	Dr.		2,82,000
	Calls-In-Arrears A/c (4,000×3)			12,000
	To Share First and Final A/c (46,000×3)				2,94,000
	(Being share First and Final money received except 4,000 shares)
	Share Capital A/c (4,000×10)	Dr.		40,000
	To Forfeited Shares A/c (4,000×7)				28,000
	To Calls-In-Arrears A/c (4,000×3)				12,000
	(Being share forfeited for First and Final Calls of 4,000 shares)
	Bank A/c (2,000×5)	Dr.		10,000
	Forfeited Shares A/c (2,000×5)	Dr.		10,000
	To Share Capital A/c (2,000×10)				20,000
	(Being 2,000 shares forfeited reissued as fully paid-up)
	Forfeited Shares A/c	Dr.		4,000
	To Capital Reserve A/c				4,000
	(being balance in Forfeited Shares account of reissued shares transferred to Capital Reserve 28,000×2,000÷4,000= 14,000-10,000=4,000)

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