12th | Accounting for Share Capital | Question No. 93 To 96 | Ts Grewal Solution 2025-2026

Question 93:

'Telecom Ltd.' issued 20,000 Equity Shares of ₹10 each at a premium of ₹5 per share, payable as: ₹7 (including premium) on application, ₹5 on allotment and the balance after three months of allotment. A shareholder to whom 200 shares were allotted failed to pay the allotment and call money and his shares were forfeited. 160 of the forfeited shares were reissued for ₹1,600.
Give necessary entries in company's Journal and the Balance Sheet.

Answer:

Issued and Applied 20,000 equity shares of ₹10 each at a premium of ₹5

Application	₹	7	(2+5)
Allotment	₹	5
First and Final Call	₹	3
		15	(10+5) per share

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

	Bank A/c	Dr.		140,000
	To Equity Share Application A/c				140,000
	(Share application money received for 20,000 shares at ₹7 each)

	Equity Share Application A/c	Dr.		1,40,000
	To Equity Share Capital A/c				40,000
	To Securities Premium A/c				1,00,000
	(Share application money of 20,000 shares transferred Share Capital at ₹25 per share and Securities Premium at ₹5 per share)

	Equity Share Allotment A/c	Dr.		1,00,000
	To Equity Share Capital A/c				1,00,000
	(Share allotment due on 20,000 shares at ₹5 each)

	Bank A/c	Dr.		99,000
	Calls-in-Arrears A/c	Dr.		1,000
	To Equity Share Allotment A/c				1,00,000
	(Share allotment received on 19,800 shares and a holder of 200 shares failed to pay it)

	Equity Share First and Final call A/c	Dr.		60,000
	To Equity Share Capital A/c				60,000
	(First and final call due on 20,000 shares at ₹3 each)

	Bank A/c	Dr.		59,400
	Calls-in-Arrears A/c	Dr.		600
	To Equity Share First and Final Call A/c				60,000
	(First and final call received on 19,800 shares and a holder of 200 shares failed to pay it)

	Equity Share Capital A/c	Dr.		2,000
	To Share Forfeiture A/c (₹2 × 200 Shares)				400
	To Calls-in-Arrears A/c				16,00
	(200 shares of ₹10 each forfeited for the non-payment amount due ₹8 per share)

	Bank A/c	Dr.		1,600
	To Equity Share Capital A/c				1,600
	(160 shares of ₹10 each re-issued for the sum of ₹1,600)

	Share Forfeiture A/c	Dr.		320
	To Capital Reserve A/c				320
	(Balance in Share Forfeiture of 160 re-issued shares transferred to Capital Reserve)

As per the Schedule III of Companies Act, 2013, the Company's Balance Sheet is presented as follows.

Telecom Ltd.
Balance Sheet
Particulars	Note No.	Amount (₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital	1	1,99,680
b. Reserves and Surplus	2	1,00,320
2. Non-Current Liabilities
3. Current Liabilities
Total		3,00,000

II. Assets
1. Non-Current Assets
2. Current Assets
a. Cash and Cash Equivalents	3	3,00,000
Total		3,00,000

NOTES TO ACCOUNTS


Note No.	Particulars		Amount (₹)
1	Share Capital
	Authorised Share Capital
	…… Equity Shares of ₹10 each		-
	Issued Share Capital
	20,000 Equity Shares of ₹10 each		2,00,000
	Subscribed, Called-up and Paid-up Share Capital
	19,960 Equity Shares of ₹10 each	1,99,600
	Add: Shares Forfeited (40 shares × ₹2)	80	1,99,680

2	Reserves and Surplus
	Securities Premium	1,00,000
	Capital Reserve	320	1,00,320

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

Working Notes: 1. Share Forfeiture of Re-issued Shares

Share Forfeiture

(at the time of forfeiture after deducting premium)

Cr.

(7 – 5)

Less: Share Forfeiture (at the time of re-issue)

Dr.

NIL

Balance in Share Forfeiture after re-issue

Cr.

per share

Capital Reserve = Balance in Share Forfeiture after reissue (per share) × Number of Shares Re-issued = ₹2 × 160 = ₹320

2. Calculation of balance remaining in Share Forfeiture Account (to be shown in the Balance Sheet)

Share Forfeiture (at the time of forfeiture of 200 shares)	=	400	Debit
Less: Share Forfeiture (at the time re-issue of 160 shares)	=	(320)	Credit
Balance in Share Forfeiture Account (for 40 shares which are not re-issued)	=	₹80	Debit

Question 94:

Healthy Foods Ltd. had authorised capital of ₹50,00,000, 5,00,000 equity shares of ₹10 each issued 3,75,000 equity shares for subscription at a premium of 20% payable ₹4 on application, ₹5 on allotment and balance as first and final call. The shares were subscribed, and due amounts were received except allotment money on 25,000 shares. These shares were forfeited. Later these shares were reissued at ₹7 paid-up and ₹50,000 were transferred to Capital Reserve. First and final call was demanded from the shareholders and was received except on 10,000 which was transferred to Calls-in-Arrears Account.

Pass the Journal entries for forfeiture, reissue of forfeited shares and first and final call.

Answer:

Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Share Capital A/c (25,000×7)	Dr.		1,75,000
	Securities Premium Reserve A/c (25,000×2)			50,000
	To Forfeited Shares A/c (25,000×4)				1,00,000
	To Calls-In-Arrears A/c (25,000×5)				1,25,000
	(Being share forfeited for Non Payment of allotment)
	Bank A/c (25,000×5)	Dr.		1,25,000
	Forfeited Shares A/c (25,000×2)	Dr.		50,000
	To Share Capital A/c (25,000×7)				1,75,000
	(Being 25,000 shares forfeited reissued at the rate of ₹5 per share credited as fully paid)
	Forfeited Shares A/c	Dr.		50,000
	To Capital Reserve A/c				50,000
	(Being full amount Forfeited on 25,000 Shares reissued, transferred to Capital Reserve)
	Share First and Final Call A/c (3,75,000×3)Dr.			11,25,000
	To Share Capital A/c (3,75,000×3)				11,25,000
	(Being 3,75,000 shares were due on first and final call)
	Bank A/c (3,65,000×3)Dr.			10,95,000
	Share First and Final Call A/c (10,000×3)Dr.			30,000
	To Share Capital A/c (3,75,000×3)				11,25,000
	(Being First and final call was received except on 10,000 shares)

Question 95:

Panasonic Ltd. was formed on 1st April, 2024 with an authorised capital of ₹2,00,000 , divided into 2,000 Equity Shares of ₹100 each. 1,000 shares were issued as fully paid to the vendors of building for payment of the purchase consideration. The remaining 1,000 shares were of fered or 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 900 shares which were duly allotted and the allotment money was received in full . At the time of the first call, a shareholder who held 100 shares failed to pay the first call money and his shares were forfeited. These shares were reissued @ ₹60 per share , ₹70 per share paid-up.
Final call has not been made.
You are required to
(i) give necessary journal entries to record the above transactions and
(ii) show how share capital would appear in the Balance Sheet of the company.

Answer:

Authorised Capital: 2,000 equity shares at ₹100 each

Issued Capital:

1,000 equity shares at ₹100 each to the vendor of the building

1,000 equity shares at ₹100 each with a premium ₹5 to the public

Applied by public: 900 equity shares

Payable by public as:

Application	₹	10
Allotment	₹	25	(20+5)
First Call	₹	40
Called-up		75	(70+5)
Final Call	₹	30
	₹	105	(100+5)

Books of PanasonicLimited Journal
Date	Particulars		L.F.	Debit ₹	Credit ₹

	Building A/c	Dr.		1,00,000
	To Vendor A/c				1,00,000
	(Building purchased from the vendor)

	Vendor A/c	Dr.		1,00,000
	To Equity Share Capital A/c				1,00,000
	(1,000 equity shares of ₹100 each issued to the vendor of building)

	Bank A/c	Dr.		9,000
	To Equity Share Application A/c				9,000
	(Share application money received for 900 shares at ₹10 each)

	Equity Share Application A/c	Dr.		9,000
	To Equity Share Capital				9,000
	(Share application money of 900 shares at ₹10 each transferred to Share Capital)

	Equity Share Allotment A/c	Dr.		22,500
	To Securities Premium				4,500
	To Equity Share Capital A/c				18,000
	(Share allotment due on 900 shares at ₹25 each including ₹5 premium)

	Bank A/c	Dr.		22,500
	To Equity Share Allotment A/c				22,500
	(Share allotment money received on 900 shares at ₹25 each)

	Equity Share First Call A/c	Dr.		36,000
	To Equity Share Capital A/c				36,000
	(First call due on 900 shares at ₹40 each)

	Bank A/c	Dr.		32,000
	Calls-in-Arrears A/c			4,000
	To Equity Share First-call A/c				36,000
	(First call received on 800 shares and a holder of 100 shares failed to pay it)

	Equity Share Capital A/c	Dr.		7,000
	To Share Forfeiture A/c				3,000
	To Calls-in-Arrears A/c				4,000
	(100 shares of ₹100 each, ₹70 called-up forfeited for the non-payment of ₹40)

	Bank A/c	Dr.		6,000
	Share Forfeiture A/c	Dr.		1,000
	To Equity Share Capital A/c				7,000
	(100 shares of ₹100 each, re-issued at ₹60 per share as ₹70 paid-up)

	Share Forfeiture A/c	Dr.		2,000
	To Capital Reserve A/c				2,000
	(Balance in Share Forfeiture the Account after re-issue transferred to Capital Reserve)

As per the Schedule III of Companies Act 2013, the Company's Balance Sheet is presented as follows.

PanasonicLtd.
Balance Sheet
Particulars	Note No.	(₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital	1	1,63,000
b. Reserves and Surplus	2	6,500
2. Non-Current Liabilities
3. Current Liabilities
Total		1,69,500

II. Assets
1. Non-Current Assets
a. Fixed Assets
i. Tangible Assets	3	1,00,000
2. Current Assets
a. Cash and Cash Equivalents	4	69,500
Total		1,69,500

NOTES TO ACCOUNTS


Note No.	Particulars		(₹)
1	Share Capital
	Authorised Share Capital
	2,000 Equity Shares of ₹100 each		2,00,000
	Issued Share Capital
	2,000 Equity Shares of ₹100 each		2,00,000
	Subscribed, Called-up and Paid-up Share Capital
	1,000 Equity Shares of ₹100 each(for consideration other than cash)	1,00,000
	900 Equity Shares of ₹100 each, ₹70 Called-up	63,000	1,63,000

2	Reserves and Surplus
	Securities Premium	4,500
	Capital Reserve	2,000	6,500

3	Tangible Assets
	Building		1,00,000

4	Cash and Cash Equivalents
	Cash at Bank		69,500

Working Notes:

Share Forfeiture (at the time of forfeiture)	3,000	Credit
Less: Share Forfeiture (at the time of re-issue)	1,000	Debit
Balance in Share Forfeiture (after re-issue)	2,000	Credit

Capital Reserve = Balance in Share Forfeiture (after re-issue) = ₹2,000

Question 96:

Sukanya Ltd. invited applications for issuing 1,00,000 equity shares of ₹ 10 each. The shares were issued at a premium of ₹ 20 per share. The amount was payable as follows:

On Application and Allotment	—	₹14 per share (including premium of ₹ 10),
On First Call	—	₹ 8 per share (including premium of ₹ 5),
On Final Call	—	₹ 8 per share (including premium of ₹ 5).

Applications for 96,000 shares were received. Rohit , a shareholder holding 7,000 shares, failed to pay both the calls and Namit , a holder of 5,000 shares , did not pay the final call.
Shares of Rohit and Namit were forfeited . Of the forfeited shares 8,000 shares including all the shares of Rohit were reissued to Reena at ₹ 8 per share fully paid-up.
Pass necessary journal entries for the above transactions in the books of Sukanya Ltd. (CBSE 2016 C)

Answer:

Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Bank A/c (96,000×14)	Dr.		13,44,000
	To Equity Share Application and Allotment A/c				13,44,000
	(Application money received)

	Equity Share Application and Allotment A/c	Dr.		13,44,000
	To Equity Share Capital A/c (96,000×4)				3,84,000
	To Security Premium Reserve A/c (96,000×10)				9,60,000
	(Application money adjusted to Share Capital)

	Equity Share First Call A/c (96,000×8)	Dr.		7,68,000
	To Equity Share Capital A/c (96,000×3)				2,88,000
	To Security Premium Reserve A/c (96,000×5)				4,80,000
	(First call money due)

	Bank A/c (7,68,000 – 56,000)	Dr.		7,12,000
	To Equity Share First Call A/c				7,12,000
	(First call money received)

	Equity Share Second Call A/c (96,000×8)	Dr.		7,68,000
	To Equity Share Capital A/c (96,000×3)				2,88,000
	To Security Premium Reserve A/c (96,000×5)				4,80,000
	(Second call money due)

	Bank A/c (7,68,000 – 56,000 – 40,000)	Dr.		6,72,000
	To Equity Share Second Call A/c				6,72,000
	(Second call money received)

	Equity Share Capital A/c	Dr.		1,20,000
	Security Premium Reserve A/c (7,000×10 + 5,000×5)	Dr.		95,000
	To Equity Share First Call A/c				56,000
	To Equity Share Second Call A/c				96,000
	To Shares Forfeited A/c (7,000×4 + 5,000×7)				63,000
	(Shares Forfeited)

	Bank A/c (8,000×8)	Dr.		64,000
	Shares Forfeited A/c (8,000×2)	Dr.		16,000
	To Equity Share Capital A/c				80,000
	(Shares Reissued)

	Shares Forfeited A/c	Dr.		19,000
	To Capital Reserve A/c				19,000
	(Prof it on Reissue transferred to Capital Reserve A/c)

Working Notes:

WN1: Amount transferred to Capital Reserve

Amount forfeited on reissued shares of Rohit = ₹28,000

Amount forfeited on reissued shares of Namit=Amount Forfeited×Shares Re-issuedShares Forfeited

=35,000×1,0005,000=7,000

Total amount forfeited on reissued shares = 28,000 + 7,000 = ₹35,000

Amount transferred to Capital Reserve = 35,000 – 16,000 = ₹19,000

Ts Grewal Solution 2025-2026

Click below for more Questions

Class 12 / Volume – 2

commercemine

Chapter 9- Company Accounts- Accounting for Share Capital