12th | Accounting For Share Capital / Issue of share capital | Question No. 73 To 76 | Ts Grewal Solution 2026-2027

Question 73:

Sunshine Ltd. issued 20,000 shares of ₹100 each payable ₹25 per share on application , ₹25 per share on allotment and the balance in two calls of ₹25 each. The company did not make the final call of ₹25 per share. All the money was duly received with the exception of the amount due on the first call on 400 shares held by Mr. Modi. The Board of Directors forfeited these shares and subsequently reissued them @ ₹75 per share paid-up for a sum of ₹28,000.
Journalise the above transactions and prepare Share Capital Account.

Answer:

Issued and applied capital 20,000 shares of ₹100 each

Payable as:

Application	₹	25
Allotment	₹	25
First Call	₹	25
Called-up	₹	75	per share
Final Call	₹	25
	₹	100	per share

Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)

	Bank A/c	Dr.		5,00,000
	To Share Application A/c				5,00,000
	(Share application money received for 20,000 shares at ₹25 each)

	Share Application A/c	Dr.		5,00,000
	To Share Capital A/c				5,00,000
	(Application money transferred to Share Capital Account)

	Share Allotment A/c	Dr.		5,00,000
	To Share Capital A/c				5,00,000
	(Share Allotment due on 20,000 shares at ₹25 each)

	Bank A/c	Dr.		5,00,000
	To Share Allotment A/c				5,00,000
	(Allotment money received)

	Share First Call A/c	Dr.		5,00,000
	To Share Capital A/c				5,00,000
	(Share First Call due on 20,000 shares of ₹25 each)

	Bank A/c	Dr.		4,90,000
	Calls-in-Arrears A/c	Dr.		10,000
	To Share First Call A/c				5,00,000
	(Share First Call ₹25 per share received on 19,600 shares and a holder of 400 shares did not pay it)

	Share Capital A/c	Dr.		30,000
	To Share Forfeiture A/c				20,000
	To Calls-in-Arrears A/c				10,000
	(400 shares of ₹100 each, ₹75 called-up, forfeited for the non-payment of Share First Call ₹25 per share)

	Bank A/c	Dr.		28,000
	Share Forfeiture A/c	Dr.		2,000
	To Share Capital A/c				30,000
	(400 shares of ₹100 each, ₹75 paid-up, reissued for the sum of ₹28,000)

	Share Forfeiture A/c	Dr.		18,000
	To Capital Reserve A/c				18,000
	(Balance in share forfeiture after re-issue, transferred to capital reserve)

Share Capital Account
Dr.			Cr.
Particulars	(₹)	Particulars		(₹)

Share Forfeiture	20,000	Share Application		5,00,000
Calls-in-Arrears	10,000	Share Allotment		5,00,000
		Share First Call		5,00,000
		Bank		28,000
Balance c/d		Share Forfeiture		2,000

	15,30,000			15,30,000

Working Note-

Share Forfeiture Credit	20,000
Less: Share Forfeiture Debit	2,000
Balance in Share Forfeiture Account after re-issue	18,000

Capital Reserve = Balance in Share Forfeiture Account after re-issue

= ₹18,000

Question 74:

Mahira Ltd. forfeited 800 shares of ₹10 each on which first call of ₹3 per share was not received. The second and final call of ₹2 per share was not yet called. Out of these, 400 shares were reissued as ₹8 paid-up for ₹7 per share.

Pass the necessary Journal entries.

(CBSE 2025)

Answer:

	In the Books of Mahira Ltd. Journal
Date		Particulars		L.F.	Debit (₹)	Credit (₹)
		Equity Share Capital A/c	Dr.		6,400
		To Forfeited Shares A/c				4,000
		To Share First Call A/c				2,400
		(Being 800 shares forfeited for non-payment of first call of ₹3 per share, with ₹8 called up per share)

		Bank A/c	Dr.		2,800
		Forfeited Shares A/c	Dr.		400
		To Equity Share Capital A/c				3,200
		(Being 400 forfeited shares reissued at ₹7 per share as ₹8 paid-up)

		Forfeited Shares A/c	Dr.		1,600
		To Capital Reserve A/c				1,600
		(Being the gain on reissue of 400 shares transferred to Capital Reserve)

Working Notes:

1. Called-up value per share:

Face Value ₹10- Uncalled Second call ₹2= ₹8 per share

2. Amount received (Forfeited) per share:

Called-up ₹8-uppaid First Call ₹3= ₹5 per share

Total share forfeiture credit = 800 shares × ₹5 = ₹ 4,000

3. Discount allowed on Reissue:
Paid – up value ₹8- Reissue price ₹7 = ₹ 1

Total shares forfeited 400

Total shares forfeited 400× ₹1 = ₹ 400

4. Transfer to Capital Reserve:

Forfeited amount on 400 reissued shares 400×5 =₹ 2,000

Amount left after deduction of discount from forfeited amount to be transferred to capital reserve = ₹2,000-₹400=₹1,600

Question 75:

The Hindustan Manufacturing Ltd. had a total subscribed capital of ₹10,00,000 in Equity Shares of ₹10 each of which ₹7.50 were called-up. A final call of ₹2.50 was made and all amount paid except two calls of ₹2.50 each in respect of 100 shares held by D . These shares were forfeited and reissued at ₹8 per share .
Pass necessary journal entries (including that of cash) to record the transactions of final call , forfeiture of shares and reissue of forfeited shares . Also, prepare the Balance Sheet of the company.

Answer:

Books of Hindustan Manufacturing Limited
Journal
Date	Particulars		L.F.	Debit ₹	Credit ₹

	Equity Share Final Call A/c	Dr.		2,50,000
	To Equity Share Capital A/c				2,50,000
	(Share Final Call due on 1,00,000 shares at ₹2.5 per share)

	Bank A/c	Dr.		2,49,750
	Calls-in-Arrears A/c	Dr.		250
	To Equity Share Final Call A/c				2,50,000
	(Share Final Call of ₹2.5 per share received from 99,900 shares and 100 shares did not pay it)

	Equity Share Capital A/c	Dr.		1,000
	To Share Forfeiture A/c				500
	To Calls-in-Arrears A/c				500
	(100 shares of ₹10 each forfeited for the non-payment of two calls of ₹2.5 each)

	Bank A/c	Dr.		800
	Share Forfeiture A/c	Dr.		200
	To Equity Share Capital A/c				1,000
	(100 shares of ₹10 each reissued at ₹8 per share, fully paid-up)

	Share Forfeiture A/c	Dr.		300
	To Capital Reserve A/c				300
	(Balance in Share Forfeiture Account after re-issue of shares, transferred to Capital Reserve)

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

Hindustan Manufacturing Ltd.
Balance Sheet
Particulars	Note No.	(₹)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital	1	10,00,000
b. Reserves and Surplus	2	300
2. Non-Current Liabilities
3. Current Liabilities
Total		10,00,300

II. Assets
1. Non-Current Assets
2. Current Assets
a. Cash and Cash Equivalents	3	10,00,300
Total		10,00,300

NOTES TO ACCOUNTS


Note No.	Particulars	(₹)
1	Share Capital
	Authorised Share Capital
	1,00,000 shares of ₹10 each	10,00,000
	Issued Share Capital
	1,00,000 shares of ₹10 each	10,00,000
	Subscribed, Called-up and Paid-up Share Capital
	1,00,000 shares of ₹10 each	10,00,000

2	Reserves and Surplus
	Capital Reserve	300

3	Cash and Cash Equivalents
	Cash at Bank	10,00,300

Working Notes:

Share Forfeiture Credit (100 shares × ₹5 each)	500
Less: Share Forfeiture Debit (100 share × ₹2 each)	200	Loss on re-issue
Balance in Share Forfeiture Account after re-issue	300

Capital Reserve = Balance in Share Forfeiture Account after re-issue = ₹300

Question 76:

Star Ltd. forfeited 500 Equity Shares of ₹100 each for non-payment of first call of ₹30 per share . The final call of ₹10 per share was not yet made. Out of these, 60% shares were reissued for ₹39,000 fully paid. journalise the forfeiture and reissue of shares.

Answer:

Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Equity Share Capital A/c (500×90)	Dr.		45,000
	To Equity Share 1^st Call A/c (500×30)				15,000
	To Share Forfeited A/c (500×60)				30,000
	(500 equity shares forfeited for non-payment of final call)

	Bank A/c (300×130)	Dr.		39,000
	To Equity Share Capital A/c (300×100)				30,000
	To Security Premium Reserve A/c (300×30)				9,000
	(300 shares are reissued @130 per share)

	Share Forfeited A/c	Dr.		18,000
	To Capital Reserve A/c				18,000
	(Prof it on reissue of 300 shares transferred to Capital Reserve)

Working Note:

Amount transferred to Capital Reserve

Shares Re-issued = 300

Shares Forfeited = 500

Amount forfeited in respect of 300 shares = Amount Forfeited × Shares Re-issued Shares Forfeited

= 30,000×300500=18,000

Ts Grewal Solution 2026-2027

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Class 12 / Volume – 2

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12th | Accounting For Share Capital / Issue of share capital | Question No. 73 To 76 | Ts Grewal Solution 2026-2027

Chapter 1- Company Accounts- Accounting for Share Capital