12th | Accounting For Share Capital / Issue of share capital | Question No. 97 To 100 | Ts Grewal Solution 2026-2027

Question 97:

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 Panasonic Limited 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 98:

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

Question 99:

Abhipra 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 ₹14 per share (including premium of ₹10),

On Allotment ₹8 per share (including premium of ₹5)

On First and Final Call ₹8 per share (including premium of ₹5).

Applications for 90,000 shares were received. Paresh, a shareholder holding 5,000 shares, did not pay the allotment money and call. While Dharam, holder of 3,000 shares, did not pay the call. Shares of Paresh and Dharam were forfeited. Of the forfeited shares, 5,000 shares including 3,000 shares of Paresh and 2,000 shares of Dharam were reissued to Parul at 8 per share as fully paid-up.

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

Answer:

Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Bank A/c (90,000×14)	Dr.		12,60,000
	To Share Application A/c				12,60,000
	(Being share application money received)
	Share Application A/c (90,000×14)	Dr.		12,60,000
	To Share Capital A/c (90,000×4)				3,60,000
	To Securities Premium Reserve A/c (90,000×10)				9,00,000
	(Being share application money transferred to share capital and Securities Premium Reserve)
	Share allotment A/c (90,000×8)	Dr.		7,20,000
	To Share Capital A/c (90,000×3)				2,70,000
	To Securities Premium Reserve A/c (90,000×5)				4,50,000
	(Being share allotment money transferred to share capital and Securities Premium Reserve)
	Bank A/c (85,000×8)	Dr.		6,80,000
	To Share Allotment A/c				6,80,000
	(Being share allotment money received and except 5,000 shares)
	Share First and Final Call A/c (90,000×8)	Dr.		7,20,000
	To Share Capital A/c (90,000×3)				2,70,000
	To Securities Premium Reserve A/c (90,000×5)				4,50,000
	(Being share First and Final Call money transferred to share capital and Securities Premium Reserve)
	(Being first and final call due)
	Bank A/c [(90,000-8,000) ×3]	Dr.		6,56,000
	To Share First and Final A/c				6,56,000
	(Being share First and Final money received except [5,000+3,000] 8,000 shares)
	Share Capital A/c (8,000×10)	Dr.		80,000
	Securities Premium Reserve A/c	Dr.		65,000
	(5,000×10+3,000×5)
	To Forfeited Shares A/c (4,000×7)				41,000
	To Share Allotment A/c				40,000
	To Share First and Final A/c				64,000
	(Being share forfeited for allotment and First and Final Calls of 5,000 shares and for First and Final Calls of 3,000 shares)
	Bank A/c (5,000×8)	Dr.		40,000
	Forfeited Shares A/c (5,000×2)			10,000
	To Share Capital A/c (5,000×10)				50,000
	(Being 5,000 shares forfeited reissued at ₹8 as fully paid-up)
	Forfeited Shares A/c	Dr.		16,000
	To Capital Reserve A/c				16,000
	(Being full amount Forfeited on 2,000 Shares reissued, transferred to Capital Reserve)

Working notes:

Forfeited amount of Paresh 3,000 shares 20,000÷5,000×3,000= 12,000

Forfeited amount of Parul 2,000 shares 21,000÷3,000×2,000= 14,000

Total Forfeited amount = 12,000+14,000=26,000

Amount to be transferred to capital reserve = Total Forfeited amount – Discount on reissue

16,000= 26,000-10,000

Determination of Amount Realised from Reissue of Shares

Question 100:

"Sagar Ltd.' forfeited 1,000 shares of 10 each for non-payment of first and final call of ₹2 per share. These shares were reissued and gain on reissue transferred to Capital Reserve was 5,000. Determine the amount realised from reissue of shares.

Answer:

Amount forfeited on 1,000 shares par shares is ₹8 = ₹8,000

Amount transferred to capital reserve = ₹5,000

Face value of all reissued shares = ₹10,000 (1,000×₹10)

Amount of discount = ₹8,000 - ₹5,000 = ₹3,000

Therefore, amount realized from reissue of shares = ₹10,000 - ₹3,000 = ₹7,000

Reissue price par share = ₹7,000 ÷ 1,000 = ₹7

Ts Grewal Solution 2026-2027

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12th | Accounting For Share Capital / Issue of share capital | Question No. 97 To 100 | Ts Grewal Solution 2026-2027

Chapter 1- Company Accounts- Accounting for Share Capital