12th | Accounting For Share Capital / Issue of share capital | Question No. 53 To 56 | Ts Grewal Solution 2026-2027

Question 53:

Sangita Limited invited applications for issuing 60,000 shares of ₹10 each at par. The amount was payable as follows: on application ₹2 per share; on allotment₹3 per share; on first and final call ₹5 per share. Applications were received for 92,000 shares.

Allotment was made on the following basis: (a) to applicants for 40,000 shares: full; (b) to applicants for 50,000 shares: 40%; (c) to applicants for 2,000 shares: nil.

₹1,08,000 was realised on account of allotment (excluding the amount carried from application money)and ₹2,50,000 on account of call. The directors decided to forfeit shares of those applicants to whom full allotment was made and on which allotment money was overdue. Pass Journal entries in the books of Sangita Limited to record the above transactions.

(CBSE Sample Paper 2013)

Answer:

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

	Bank A/c	Dr.		1,84,000
	To Share Application A/c				1,84,000
	(Share application money received for 92,000 shares at ₹2 each)

	Share Application A/c	Dr.		1,84,000
	To Share Capital A/c				1,20,000
	To Share Allotment A/c				60,000
	To Bank A/c				4,000
	(Share application of 90,000 shares transferred to Share Capital, and excess adjusted on allotment and remaining amount returned)

	Share Allotment A/c	Dr.		1,80,000
	To Share Capital A/c				1,80,000
	(Share allotment due on 90,000 shares)

	Bank A/c	Dr.		1,08,000
	To Share Allotment A/c				1,08,000
	(Share allotment money received)

	Share capital A/c (4000×10)	Dr.		40,000
	To Share allotment A/c (4000×3)				12,000
	To Share First and Final Call A/c (4000×2) To Share Forfeiture A/c				20,000 8,000
	(4000 share forfeited)

Working notes;

Shares applied	Shares allotted	Application Money received	Share capital	Share allotment	Bank (Refund)
40,000	40,000	80,000	80,000	-	-
		40,000×2
50,000	20,000	1,00,000	40,000	60,000
		50,000×2
2,000	Nil	4,000	-	-	4,000
		2,000×2
92,000	90,000	1,84,000	1,20,000	60,000	4,000

Due on allotment 60,000×3

Transferred from application money

1,80,000

60,000

Money received on allotment

120,000

1,08,000

Calls in arrears

12,000

No. of shares on which allotment money not received 12000/3=4000 shares

Question 54:

Alpha Ltd. issued 20,000 Equity Shares of ₹10 each at par payable: On application ₹2 per share; on allotment ₹3 per share; on first call ₹3 per share; on second and final call ₹2 per share.Mr. Gupta was allotted 100 shares. Pass necessary Journal entry relating to the forfeiture of shares in each of the following alternative cases:

Case I:	If Mr. Gupta failed to pay the allotment money and his shares were immediately forfeited.
Case II:	If Mr. Gupta failed to pay allotment money and on his subsequent failure to pay the first call, his shares were forfeited.
Case III:	If Mr. Gupta failed to pay the first call and on his subsequent failure to pay the second and final call, his shares were forfeited.

Answer:

Application		₹	2
Allotment		₹	3
First Call		₹	3
Final Call		₹	2
			10
Books of Alpha Limited Journal
Date	Particulars				L.F.	Debit (₹)	Credit (₹)

Case I	Share Capital A/c (100×5)			Dr.		500
	To Share Forfeiture A/c						200
	To Share Allotment A/c						300
	(100 shares of ₹10 each, ₹5 called-up, forfeited for the non-payment of allotment)

Case II	Share Capital A/c (100 × 8)			Dr.		800
	To Share Forfeiture A/c						200
	To Share Allotment A/c						300
	To Share First Call A/c						300
	(100 shares of ₹10 each, ₹8 called-up forfeited for non-payment allotment and first-call)

Case III	Share Capital A/c			Dr.		1,000
	To Share Forfeiture A/c						500
	To Share First Call A/c						300
	To Share Final Call A/c						200
	(100 shares of ₹10 each forfeited for the non-payment ₹5 each)

Question 55:

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

Question 56:

Sona Ltd. invited applications for issuing 60,000 equity shares of ₹50 each. The amount was payable as follows:

On Application ₹20 per share

On Allotment ₹25 per share

On First and Final Call Balance

Applications for 90,000 shares were received. Applications for 10,000 shares were rejected and application money refunded. Shares were allotted on pro rata basis to the remaining applicants. Excess money received with applications was adjusted towards sums due on allotment. Rahul, to whom 600 shares were allotted, failed to pay the allotment money and his shares were forfeited immediately. Afterwards, the first and final call was made. Mona, to whom 1,000 shares were allotted, failed to pay the first and final call. Her shares were also forfeited.

Pass necessary Journal entries in the books of Sona Ltd. for the above transactions.

(CBSE 2025)

Answer:

	In the Books of Sona Ltd. Journal
Date		Particulars			L.F.	Debit (₹)	Credit (₹)
		Bank A/c (90,000×20)		Dr.		18,00,000
		To Equity Share Application A/c					18,00,000
		(Being Application for 90,000 shares were received)


		Equity Share Application A/c	Dr.			18,00,000
		To Equity Share Capital A/c					12,00,000
		To Equity share Allotment A/c					4,00,000
		To Bank A/c					2,00,000
		(Being Application money transferred for 60,000 shares, excess adjusted towards allotment and money on rejected applications refunded)

		Equity Shares Allotment A/c		Dr.		15,00,000
		To Equity Share Capital A/c					15,00,000
		(Being Allotment money due on 60,000 shares @ ₹ 25 per share)

		Bank A/c		Dr.		10,89,000
		Calls-in-Arrears A/c		Dr.		11,000
		To Equity Shares Allotment A/c					11,00,000
		(Being Allotment money received except from Rahul )

		Equity Share Capital A/c		Dr.		27,000
		To Forfeited Shares A/c					16,000
		To Calls-in-Arrears A/c					11,000
		(Being 600 shares of Rahul forfeited for non-payment of allotment money)

		Equity Shares First and Final Call A/c		Dr.		2,97,000
		To Equity Share Capital A/c					2,97,000
		(Being First and Final Call made on 59,400 shares @ ₹ 5 per share)

		Bank A/c		Dr.		2,92,000
		Calls-in-Arrears A/c		Dr.		5,000
		To Equity Shares First and Final Call A/c					2,97,000
		(Being First and Final Call received except on Mona's 1,000 shares)

		Equity Share Capital A/c		Dr.		50,000
		To Forfeited Shares A/c					45,000
		To Calls-in-Arrears A/c					5,000
		(Being 1,000 shares of Mona forfeited for non-payment of First and Final Call)

Working Notes:

Applied Shares	Allotted Shares	Money received on Application @ ₹20 each	Money transferred to Share Capital @ ₹20 each	Excess	Excess money adjusted on Allotment	Excess money after Allotment to be refunded
80,000	60,000	16,00,000 (80,000×20)	12,00,000 (60,000×20)	4,00,000 * (20,000×20)	4,00,000 (20,000×20)	-
10,000	Nil	2,00,000 (10,000×20)	Nil	2,00,000	-	2,00,000
90,000	60,000	18,00,000 (90,000×20)	12,00,000 (60,000×20)		4,00,000 (20,000×20)	2,00,000

*Note: Due on allotment for (20,000×25) =5,00,000
so that total excess amount ( 4,00,000) left after transferring to share capital can be transferred to allotment.

Ts Grewal Solution 2026-2027

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12th | Accounting For Share Capital / Issue of share capital | Question No. 53 To 56 | Ts Grewal Solution 2026-2027

Chapter 1- Company Accounts- Accounting for Share Capital