12th | Accounting For Share Capital / Issue of share capital | Question No. 109 And 112 | Ts Grewal Solution 2026-2027

Question 109:

Alok Ltd. invited applications for 1,00,000 Equity Shares of ₹10 each. The shares were issued at a premium of ₹5 per share. The amount was payable as follows:

On Application and Allotment ₹8 per share (including premium ₹3). Balance including premium on the First and Final Call.

Applications for 1,50,000 shares were received. Applications for 10,000 shares were rejected and pro rata allotment was made to the remaining applicants on the following basis:

(i) Applications for 80,000 shares were allotted 60,000 shares; and

(ii) Applications for 60,000 shares were allotted 40,000 shares.

Mohan, who belonged to the first category and was allotted 300 shares, failed to pay the first and final call money. Sohan, who belonged to the second category and was allotted 200 shares also failed to pay the call money, their shares were forfeited. The forfeited shares were reissued @ ₹12 per share fully paid-up.

Prepare Cash Book and pass necessary Journal entries.

Answer:

The amount was payable as follows:

Application and Allotment	₹8 (5+3 Premium)
First and Final Call	₹7 (5+2 Premium)

Books of Visa Ltd. Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Share Application and Allotment A/c	Dr.		12,00,000
	To Share Capital A/c (1,00,000×5)				5,00,000
	To Securities Premium Reserve A/c (1,00,000×3)				3,00,000
	To First and Final Call A/c				3,20,000
	To Bank A/c (10,000×8)				80,000
	(Share application of 10,000 shares transferred to Share Capital)
	Share First and Final Call A/c Dr.			7,00,000
	To Share Capital A/c (1,00,000×5)				5,00,000
	To Securities Premium Reserve A/c (1,00,000×2)				2,00,000
	Share Capital A/c Dr.			5,000
	Securities Premium Reserve A/c Dr.			1,000
	To First and Final Call A/c				1,900
	To Share Forfeited A/c				4,100
	(Being 500 share for Forfeited for non-payment of first and final call money)
	Share Forfeited A/c Dr.			4,100
	To Capital Reserve A/c				4,100
	(Being balance forfeited Share Account transfer to capital reserve found for the share issued)

Cash Book (Only Bank Column)
Dr.			Cr.
Particulars	Bank (₹)	Particulars	Bank (₹)
To Share Application and Allotment A/c	12,00,000	By Share Application and Allotment A/c	80,000
		By Balance C/d	15,04,100
To Share First Call A/c	3,78,100
To Share Capital A/c	5,000
To SPR A/c	1,000
	15,84,100		15,84,100

Working notes:

Applied Shares	Allotted Shares	Money received on Application @ ₹ 8 each	Excess money adjusted on Money transferred to Share Capital @ ₹ 8 each	Excess money adjusted on First and Final Call	Excess money refuned
80,000	60,000	6,40,000 (80,000×8)	4,80,000 (60,000×8)	1,60,000	-
60,000	40,000	4,80,000 (60,000×8)	3,20,000 (40,000×8)	1,60,000	-
10,000	Nil	80,000 (10,000×8)	Nil	-	80,000
1,50,000	1,00,000	12,00,000 (1,50,000×8)	8,00,000 (1.00,000×8)	3,20,000	80,000

Amount receive on First and Final Call

Due on First and Final Call	7,00,000
Less: Already received	(3,20,000)
Less: Mohan and Sohan did not pay on	(1,900)
	3,78,100

	Applied	Allotted
Mohan	400	300
Sohan	300	200
		500

	Application money received	Transferred to Share Capital @ ₹ 8 each	Excess money received for First and Final Call
Mohan	3,200 (400×8)	2,400 (300×8)	800
Sohan	2,400 (300×8)	1,600 (200×8)	800
		500 Shares allotted	1,600

Mohan’s and Sohan’s Amount due on first and final call (500×7)	3,500
Less: Excess money already received for First and Final Call	1,600
Not paid by Mohan and Sohan	1,900

Question 110:

Ruchi Ltd. issued for public subscription 40,000 Equity Shares of ₹10 each at a premium of ₹2 per share payable as:

On application		—		₹2 per share;
On allotment			—	₹5 per share (including premium),
On first call	—			₹2 per share,
On second and final call	—			₹3 per share.

Applications were received for 60,000 shares. Allotment was made on pro rata basis to the applicants for 48,000 shares, the remaining applications being refused. Money overpaid on application was utilised towards sums due on allotment. Ram to whom 1,600 shares were allotted failed to pay the allotment money and Shyam to whom 2,000 shares were allotted failed to pay the two calls. These shares were subsequently forfeited after the second and final call was made. All the forfeited shares were reissued as fully paid-up @ ₹8 per share.
Give necessary Journal entries for the above transactions.

Answer:

Issued capital 40,000 shares of ₹10 each at premium of ₹2

Applied ₹60,000 shares

*Allotment made as*:		*Payable as*:
Applied	Allotted	Application	₹2
48,000	40,000	Allotment	₹5	(3+2)
12,000	NIL	First Call	₹2
60,000	40,000	Second and Final Call	₹3
			₹12	(10+2) per share

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

	Bank A/c	Dr.		1,20,000
	To Equity Share Application A/c				1,20,000
	(Application money received for 60,000 shares at ₹2 each)

	Equity Share Application A/c	Dr.		1,20,000
	To Equity Share Capital A/c				80,000
	To Equity Share Allotment A/c				16,000
	To Bank A/c				24,000
	(Share application of 40,000 shares transferred to share capital, ₹16,000 adjusted on allotment and remaining ₹24,000 refunded)

	Equity Share Allotment A/c	Dr.		2,00,000
	To Equity Share Capital A/c				1,20,000
	To Securities Premium A/c				80,000
	(Share allotment due on 40,000 shares at ₹5 each including ₹2 premium)

	Bank A/c	Dr.		1,76,640
	To Equity Share Allotment A/c				1,76,640
	(Share allotment received on all shares except on 1,600 Shares held by Ram)

	Equity Share First Call A/c	Dr.		80,000
	To Equity Share Capital A/c				80,000
	(First call due on 40,000 shares at ₹2 each)

	Bank A/c	Dr.		72,800
	To Equity Share First Call A/c				72,800
	(First call received on 36,400 shares and holders of 3,600 failed to pay it)

	Equity Share Second and Final Call A/c	Dr.		1,20,000
	To Equity Share Capital A/c				1,20,000
	(Second and final call due on 40,000 shares at ₹3 each)

	Bank A/c	Dr.		1,09,200
	To Equity Share second and Final Call A/c				1,09,200
	(Second and final call received on 36,400 shares and holders of 3,600 shares failed to pay it)

	Equity Share Capital A/c	Dr.		16,000
	Securities Premium A/c	Dr.		3,200
	To Share Forfeiture A/c				3,840
	To Equity Share Allotment A/c				7,360
	To Equity Share first Call A/c				3,200
	To Equity Share Second and Final Call A/c				4,800
	(1600 shares held by Ram forfeited for non-payment amount due including premium)

	Equity Share Capital A/c	Dr.		20,000
	To Equity Share Forfeiture A/c				10,000
	To Equity Share First Call A/c				4,000
	To Equity Share Second and Final Call A/c				6,000
	(2,000 shares held by Shyam forfeited for non-payment of amount due)

	Bank A/c	Dr.		28,800
	Share Forfeiture A/c	Dr.		7,200
	To Equity Share Capital A/c				36,000
	(3,600 shares of ₹10 each re-issued at ₹8 per share fully paid-up)

	Share Forfeiture A/c	Dr.		6,640
	To Capital Reserve A/c				6,640
	(Balance in Share Forfeiture transferred to Capital Reserve)

Working Notes:

Ram’s shares

Number of shares applied by Ram =48,000/40,000×1,600=1,920 Shares

Money received on Application (1,920 shares × ₹2)	=	₹3,840
*Less*: Application money transferred to Share Capital (1,600 shares × ₹2)	=	₹3,200
Excess money on Application	=	₹640

Share Allotment due (1,600 shares × ₹5)	₹	8,000
*Less*: Excess money on Application	₹	640
Calls-in-Arrears on Allotment	₹	7,360

Share Allotment

Share Allotment due (40,000 shares × ₹5)	2,00,000
Less: Excess money on Application	16,000
	1,84,000
Less: Calls-in-Arrears by Ram	7,360
Money received on Allotment	1,76,640

Share First Call

Share First Call due (40,000 shares × ₹2)	80,000
Less: Calls-in-Arrears by Ram and Shyam (3,600 shares ×₹2)	7,200
Money received on First Call	72,800

Share Final Call

Share Final Call due 40,000 Shares × ₹3

1,20,000

Less: Calls-in-Arrears by Ram and Shyam

(3,600 shares × ₹3)

10,800

Money received on Second and Final Call

1,09,200

Capital Reserve

Share Forfeiture on Ram’s shares (money received on application)	3,840
Share Forfeiture on Shyam’s shares (2,000 shares × ₹5)	10,000
	13,840	Cr.
*Less*: Share Forfeiture	7,200	Dr.
Capital Reserve	6,640

Question 111:

Nitro Paints Ltd. invited applications for issuing 1,60,000 equity shares of ₹10 each at a premium of ₹3 per share. The amount was payable as follows:

On application	—	₹6 per share(including premium ₹1);
On allotment	—	₹3 per share(including premium ₹1); and
The balance	—	On First and Final call.

Applications for 1,80,000 shares were received .Applications for 10,000 shares were rejected and pro rata allotment was made to the remaining applicants. Over payment received on application was adjusted towards sums due on allotment. All calls were made and were duly received except allotment and final call from Aditya who was allotted 3,200 shares. His shares were forfeited. Half of the forfeited shares were reissued for ₹43,000 as fully paid-up .
Pass necessary journal entries for the above transactions in the books of Nitro Paints Ltd. (CBSE 2017)

Answer:

Journal
Date	Particulars		L.F.	Debit (₹)	Credit (₹)
	Bank A/c (1,80,000 × 6)	Dr.		10,80,000
	To Equity Share Application A/c				10,80,000
	(Application money received)

	Equity Share Application A/c	Dr.		10,80,000
	To Equity Share Capital A/c (1,60,000 × 5)				8,00,000
	To Securities Premium Reserve A/c (1,60,000 × 1)				1,60,000
	To Share Allotment A/c (10,000×6)				60,000
	To Bank A/c (10,000×6)				60,000
	(Application money transferred)

	Equity Share Allotment A/c (1,60,000 × 3)	Dr.		4,80,000
	To Equity Share Capital A/c (1,60,000 × 2)				3,20,000
	To Securities Premium Reserve A/c (1,60,000 × 1)				1,60,000
	(Allotment money due)

	Bank A/c (4,80,000 -₹ 60,000- ₹ 8,400)	Dr.		4,11,600
	To Equity Share Allotment A/c				4,11,600
	(Allotment money received)

	Equity Share First Call A/c (1,60,000 × 4)	Dr.		6,40,000
	To Equity Share Capital A/c				4,80,000
	To Securities Premium Reserve A/c				1,60,000
	(Call money due)

	Bank A/c	Dr.		6,27,200
	To Equity Share First Call A/c				6,27,200
	(Call money received)

	Equity Share Capital A/c (3,200 × 10)	Dr.		32,000
	Securities Premium Reserve A/c (3,200 × 2)	Dr.		6,400
	To Equity Share Allotment A/c				8,400
	To Equity Share First & Final Call A/c				12,800
	To Equity Share Forfeiture A/c				17,200
	(3,200 shares forfeited)

	Bank A/c	Dr.		43,000
	To Equity Share Capital A/c				16,000
	To Securities Premium A/c				27,000
	(1,600 shares re–issued)

	Equity Share Forfeiture A/c	Dr.		8,600
	To Capital Reserve A/c				8,600
	(Prof it on re-issue transferred)

Working Notes:
Shares Applied by Aditya=1,70,000/1,60,000×3,200=3,400

*Amount unpaid by Aditya on Allotment*
Application money received	20,400
Less: Transferred to Share Capital	(19,200)
Excess received on Application	1,200
Allotment money due	9,600
Less: Excess adjustment	(1,200)
*Amount unpaid by Aditya*	8,400

Question 112:

XYZ Ltd. invited applications for issuing 50,000 Equity Shares of ₹10 each . The amount was payable as:

On application	—	₹3 per share,
On allotment	—	₹4 per share,
On first and final call	—	₹3 per share.

Applications were received for 75,000 shares and pro rata allotment was made as:
Applicants for 40,000 shares were allotted 30,000 shares on pro rata basis.
Applicants for 35,000 shares were allotted 30,000 shares on pro rata basis.
Ramu, to whom 1,200 shares were allotted out of the group applying for 40,000 shares, failed to pay the allotment money. His shares were forfeited immediately after allotment .
Shamu, who had applied for 700 shares out of the group applying for 35,000 shares , failed to pay the first and final call . His shares were also forfeited. Out of the forfeited shares, 1,000 shares were reissued @ Applicants for 40,000 shares were allotted 30,000 shares on pro rata basis. 8 per share as fully paid-up. The reissued shares included all the forfeited shares of Shamu.
Pass necessary Journal entries to record the above transactions.

Answer:

Issued 1,000 equity shares of ₹10 each

Applied 1,800 shares

Allotment made as:		Amount payable per shares as:
Applied	Allotted		Application	₹3
40,000	30,000		Allotment	₹4
35,000	20,000		First Call	₹3
1,800	1,000			₹10

Books of XYZ Limited Journal Entries
Date	Particulars		L.F.	Debit ₹	Credit ₹

	Bank A/c	Dr.		2,25,000
	To Equity Share Application A/c				2,25,000
	(Share application money received for 75,000 shares at ₹3 each)

	Equity Share Application A/c	Dr.		2,25,000
	To Equity Share Capital A/c				1,50,000
	To Equity Share Allotment A/c				75,000
	(Application money of 50,000 shares transferred to share capital and the remaining amount adjusted on allotment)

	Equity Share Allotment A/c	Dr.		2,00,000
	To Equity Share Capital A/c				2,00,000
	(Share allotment due on 50,000 shares at ₹4 each)

	Bank A/c	Dr.		1,21,400
	To Equity Share Allotment A/c				1,21,400
	(Share allotment received on 48,800 shares after adjusting the excess money on application)

	Equity Share Capital A/c (1,200 × ₹7)	Dr.		8,400
	To Share Forfeiture A/c				4,800
	To Equity Share Allotment A/c				3,600
	(1,200 shares of ₹10 each ₹7 called-up forfeited for the non-payment of allotment)

	Equity Share First and Final Call A/c	Dr.		1,46,400
	To Equity Share Capital A/c				1,46,400
	(First and final call due on 48,800 shares at ₹3 each)

	Bank A/c	Dr.		1,45,200
	To Equity Share First and Final Call A/c				1,45,200
	(Share first and call received 48,800 shares at ₹3 each)

	Equity Share Capital A/c	Dr.		4,000
	To Share Forfeiture A/c (400 × ₹7)				2,800
	To Equity Shares First and Final Call A/c				1,200
	(400 shares forfeited for the non-payment of first and final call)

	Bank A/c	Dr.		8,000
	Share Forfeiture A/c	Dr.		2,000
	To Equity Share Capital A/c				10,000
	(1,000 shares of ₹10 each re-issued at ₹8 per share fully paid-up)

	Share Forfeiture A/c	Dr.		3,200
	To Capital Reserve A/c				3,200
	(Balance of 1,000 re-issued shares in Share Forfeiture Account transferred to Capital Reserve Account)

Working Notes-

Rumu’s Share

Number of shares applied = 40,000/30,000×1,200 = 1,600 shares

Money received on Application 1,600 shares × ₹3	=	₹4,800
Money adjusted on Application 1,200 Shares × ₹3	=	₹3,600
Excess on Application		₹1,200

Allotment due on 1,200 shares × ₹4	=	4,800
Less: Excess money on Application	=	1,200
Calls-in-Arrears on Allotment		3,600

Share Allotment

Share Allotment due 50,000 shares × ₹4	=	2,00,000
Less: Excess money on application	=	75,000
		1,25,000
Less: Calls-in-Arrears on Allotment	=	3,600
Money received on Allotment	=	1,21,400

Shamu’s Shares

Number of shares allotted to Shamu =20,000/35,000×700 = 400 shares

First and Final Call

First and Final Call due; 48,800 shares × ₹3	=	1,46,400
Less: Calls-in-Arrears by Shamu; 400 shares × ₹3	=	1,200
Money received on of First and Final Call		1,45,200

Capital Reserve

Shares re-issued out the shares forfeited from Ramu = 1,000 shares − Shamu’s shares

= 1,000 − 400

= 600 shares

on re-isssue Ramu’s shares:

Capital Reverse on re-issue of 600 shares forfeited from Ramu
Share Forfeiture Cr. 4,800/1,200	=	₹	4
Share Forfeiture Dr.	=	₹	2
Share Forfeiture after re-issued		₹	2	per share

Capital Reserve after re-issue of 600 shares = Share Forfeiture after re-issue (per share) × 600 shares

= ₹2 × 600

= ₹1,200

on re-isssue Shamu’s shares:

Share Forfeiture	Cr.	₹7
Share Forfeiture	Dr.	₹2
Share Forfeiture after re-issue		₹5	per share

Capital Reserve after re-issue of 400 shares = Share Forfeiture after re-issue (per share) × 600 shares

= ₹5 × 400

= ₹2,000

Total amount of Capital Reserve = Capital Reserve of 600 shares + Capital Reserve of 400 shares

Total amount of Capital Reserve	= Capital Reserve of 600 shares + Capital Reserve of 400 shares
	= ₹1,200 + ₹2,000
	= ₹3,200

Ts Grewal Solution 2026-2027

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12th | Accounting For Share Capital / Issue of share capital | Question No. 109 And 112 | Ts Grewal Solution 2026-2027

Chapter 1- Company Accounts- Accounting for Share Capital