Practice sheet Issue of shares

Issue of shares at Par

1. X Ltd. Offered for public subscription on 1st April 2018 for 50,000 shares of Rs.10 each at par payable along with
application. Applications were received for all shares by 30th April 2018 and these shares were allotted on 15 th May
2019. Pass necessary Journal entries in the books of the company.
2. Bright Ltd. Invited the applications for 20,000 shares of Rs.10 each. The amount was payable as Rs.3 on application
, Rs.2 on allotment, Rs.4 on first call and balance on final call. The issue was fully subscribed and the amount was
duly received. Pass Journal entries for the above transactions.

Issue of shares at Premium

3. Star Ltd. Invited the applications for 40,000 Equity shares of Rs.10 each at a premium of Rs.2 per share payable
along with application. All the shares were applied and duly allotted. Pass necessary journal entries.
4. Y Ltd. Invited the applications of 30,000 shares of Rs. 10 each at a premium of Rs.2 per shares payable as follows :
Rs. 3 on application, Rs.5 on allotment , Rs. 2 on first call and balance on final call.
All the shares were applied for duly allotted. Pass necessary journal entries and also show share capital in
Company’s Balance sheet.
5. Raman Ltd. Registered with an authorized share capital of Rs.50,00,000 divided into 5,00,000 shares of Rs.10
each. The company issued 30,000 shares at a premium of 40% Payable as follows:
On application 4 (including Premium Rs.1 )
On allotment 3 (including Premium Rs.1)
On First call 3 (including Premium Rs. 1)
On Final call 3 (including Premium Rs.1 )
The issue was fully subscribed and the amount was duly received. Pass Journal entries in the books of the
company and also show share capital in Company’s Balance sheet.

Under-subscription of shares

6. X Ltd. Invited the applications of 20,000 shares of Rs.10 each at par payable along with application. Applications
were received for 18,000 shares and accepted. All the money was duly received.
7. Shiva Ltd. Authorized with share capital of Rs. 30,00,000 divided into 30,000 shares of Rs.100 each. The company
invited the applications of 20,000 shares to public payable as follows :
On applications Rs.30 per share, on allotment Rs.40 per share and Rs.30 on first and final call.
The public applied for 18,000 shares and these shares were duly accepted. All money was duly received. Pass
necessary entries in the books of company and also show share capital in Company’s Balance sheet.
8. Karan Ltd. Authorized with the share capital of 50,00,000 divided into 5,00,000 shares of 10 each. The company
invited the applications of 40,000 shares at a premium of 20% payable as follows :
Rs.3 on application, Rs.6 on allotment and Balance on First and final call.
Applications were received for 38,000 shares and all were accepted. All money was duly received. Pass Journal
entries in the books of company.
9. X Ltd. Invited the applications of 80,000 shares of Rs.100 each. The company received the applications of 1,00,000
shares. The company made pro-rata allotment to all the shares.

Over-subscription of shares

10. Bharat Ltd. Invited the applications of 50,000 shares of Rs.10 each payable as follows :
Rs.3 on applications, Rs.4 on allotment, Rs.3 on First and final call.
 The applications were received for 60,000 shares. The applications of 50,000 shares were accepted in full. The
application of 10,000 shares were rejected and the application money was refunded. All the money was duly
received.
11. Shine Ltd. Invited the applications for 80,000 shares of Rs.10 each. The amount was payable as follows :
Rs.3 on applications , Rs.4 on allotment and Rs.3 on First and final call.
The company received the applications of 85,000 shares. The company made pro-rata allotment to all shares
applied for. All the money was duly received. Pass necessary journal entries in the books of company.
12. Goodluck Ltd. Authorized with share capital of Rs. 1,00,00,000 divided into 1,00,000 shares of Rs.100 each. The
company invited the applications of 50,000 shares of Rs.100 each at a premium of 20% payable as follows:
On Applications Rs.30 per share, On allotment Rs.50 per share, On first call Rs.20 per share and final call Rs.20 per
share.
Applications were received for 70,000 shares. The company rejected the applications of 5,000 shares and
refunded the application money. The company make pro-rata allotment to remaining applicants. Excess
application money was adjusted with allotment. All the money was duly received. Pass necessary journal entries in
the books of company.

Calls in arrears

13. X Ltd. Invited the applications for 30,000 shares of Rs.10 each. The amount was payable as follows:
On application Rs.3 per share, On allotment Rs.3 per share, On first call Rs.2 per share and final call Rs.2 per share.
The issue was fully subscribed. The Directors made allotment and the money was duly received except first and
final call on 1,000 shares. Pass necessary Journal entries and also show share capital in Company’s Balance sheet.
14. Sky Ltd. Authorized with share capital of 80,00,000 divided into 80,000 shares of Rs.100 each . The company issued
50,000 shares at a premium of 20% payable as follows :
On application Rs.30, On allotment Rs.50, On first call Rs.20 and on final call Rs. 20
The issue was fully subscribed. All the money was duly received except Mr. Karan who failed to pay anything after
application on 1,000 shares and Mr. Deepak who failed to pay first and final call on 500 shares. Pass necessary
journal entries.
15. Shine Ltd. Authorized with share capital of 90,00,000 divided into 90,000 shares of Rs.100 each. The company
invited the applications of 40,000 shares at 20% premium payable as follows:
On application Rs.30 on allotment Rs.60 on first call Rs.20 and final call the balance
The company received the applications of 37,000 shares so all the applications were accepted. All the money was
received except first call which is not received on 800 shares and final call which is not received on 1,00 shares.
Pass necessary journal entries in the books of company.
16. Tata Sky Ltd. Authorized with share capital of 8,00,000 divided in to 80,000 shares of Rs.10 each. The company
invited the applications of 30,000 shares to public payable as follows:
On applications Rs.3, on allotment Rs.3 on first call Rs.2 and final call Rs.2.
The applications were received for 45,000 shares. Application money for 5,000 shares were rejected and pro-rata
allotment was made to remaining applicants.
The company did not receive first and final call on 300 shares. Pass necessary journal entries in the books of
company.
 Forfeiture of Shares
17. X Ltd. Invited the applications of 30,000 shares of Rs.10 each payable as under- Rs.3 per share on application ; Rs. 3 per
share on allotment; Rs.2 per share on first call and Rs.2 per share on final call. Ashok who had been allotted 500 shares
failed to pay both calls. His shares were forfeited. Pass necessary journal entries in the books of company.
18. Bharat Ltd. Authorized with share capital of Rs.8,00,000 divided into 80,000 shares of Rs.10 each. The company invited
the application of 40,000 shares payable as under: Rs.3 per share on application; Rs.2 per share on allotment; Rs.3 per
share on first call and Rs.2 per share on final call. Raman who had been allotted 800 shares failed to pay allotment, first
and final call. Hari who had been allotted 1,000 shares failed to pay both call. Shares of Raman and Hari were forfeited
by company. Pass necessary journal entries in the books of company.
19. Blue Star Ltd. Invited the applications of 50,000 shares of Rs.100 each payable as under: Rs.30 on applications ; Rs.20 on
allotment; Rs.30 on first call and Rs.20 on final call. Deepak who had been allotted 600 shares failed to pay allotment
and first call. His shares were forfeited after first call. The company did not make final call. Pass necessary journal
entries.
20. Y Ltd. Invited the applications of 30,000 shares of Rs.10 each at 20% premium. Payable as under: Rs.3 on application ;
Rs.5 on allotment(including premium); Rs.2 on first call and Rs. 2 on final call. Ashok who had been allotted 1,000 shares
failed to pay both call. His shares were forfeited by company. Pass necessary journal entries in the books of company.
21. Raman Ltd. Invited the applications of 50,000 shares of Rs.100 each at a premium of Rs.2 per share payable as under:
Rs.30 on applications, Rs.40 on allotment; Rs.30 on first call and Rs.20 on final call. Hari who had been allotted 1,000
shares failed to pay allotment, first and final call. His shares were forfeited by company. Pass necessary journal entries
in the books of company.
22. Gayatri Ltd. Authorized with share capital of Rs.10,00,000 divided into 1,00,000 shares of Rs.10 each . The company
invited the applications of 60,000 shares at a premium of 20% payable as under: Rs.3 on application, Rs.5 on allotment ;
Rs.2 on allotment and Rs.2 on final call. The issue was fully subscribed. All the money was duly received except Mr.
Gopal who did not pay anything after application and Mr. Shyam who failed to pay both calls. Shares of both Gopal and
Shyam were forfeited by company. Pass necessary journal entries in the books of company.
Reissue of Shares
23. Hindustan Ltd. Invited the applications of 25,000 shares of Rs.10 each payable as under: Rs.3 on applications ; Rs.4 on
allotment and Rs.3 on first and final call. Ashok who had been allotted 300 shares failed to pay first and final call. His
shares were forfeited by company and subsequently reissued at Rs.9 per share as fully paid. Pass necessary journal
entries in the books of company.
24. Wipro Ltd. Invited the applications of 40,000 shares of Rs.10 each payable as under: Rs.3 on application Rs.3 on
allotment; Rs.2 on first call and Rs. 2 on final call. Mr. Ram who had been allotted 500 shares failed to pay anything after
application and Mr. Shyam who had been allotted 300 shares failed to pay both call. Shares of Ram and Shyam were
forfeited by company. which were subsequently reissued at Rs.8 per share as fully paid. Pass necessary journal entries
in the books of company.
25. Honey Ltd. Invited the applications of 10,000 equity shares of Rs.100 each payable as follows :
On application and allotment Rs 50
On first call Rs.25
On second call Rs.25
Members holding 400 shares did not pay the second call and shares are duly forfeited,300 shares of which were
reissued at Rs.80 per share, Pass Journal entries in the books of the company.
26. S Ltd. Issued 5,000 shares of Rs.100 each at a premium of Rs.10 each payable as follows :
On application Rs.30
On allotment Rs.40(including Premium)
On first and final call Rs.40
All the shares were applied for and installments received on due dates with the exception of the allotment and first and
final call on 100 shares ; these shares were forfeited and reissued as fully paid @ Rs.105 per share.
Pass necessary Journal entries in the books of the company.
27. AB Ltd. Invited the applications of 20,000 shares of Rs.100 each at a premium of Rs 10 per share payable as follows:
On application Rs.30
On allotment Rs.40 (including premium)
On first call Rs.20
On final call Rs.20
All the shares were applied for and installments were duly received except
(i) Mr. Deepak who failed to pay allotment ,first and final call on 500 shares
(ii) Mr. Raman who failed to pay first and final call on 200 shares.
These shares of Deepak and Raman were forfeited by company and reissued at a discount of 5%. Pass necessary journal
entries in the books of company.
28. XY Ltd. Invited the applications of 60,000 shares of 100 each at a premium of 20 per share payable as follows:
On application Rs.30
On allotment Rs.40 (including premium)
On first call Rs.30
On final call Rs.20
All the money was duly received except allotment and first call on 400 shares which were forfeited by company after
first call. After 300 shares were reissued at Rs.70 per share as Rs.80 paid up. The company did not made final call. Pass
necessary journal entries in the books of company.
29. Pass entries for the forfeiture and reissue of shares :
(i) A Ltd. for forfeited 400 shares of Anil Rs.10 each fully called up for non-payment of final call of Rs.2 per share and
reissued to Sunil as fully paid up for Rs.10 per share.
(ii) B Ltd. For forfeited 500 shares of Rs.10 each fully called up for non-payment of first call of Rs.2 per share and final
call of Rs.2 per share . All these shares were reissued as fully paid for Rs.8 per share.
(iii) C Ltd. Forfeited 600 shares of Rs.10 each fully called up for non-payment of allotment money of Rs.3 per share, first
call of Rs.2 per share and final call of Rs. 2 per share. 400 of these shares were reissued at Rs.9 per share as fully paid.
(iv) D Ltd. Forfeited 800 shares of Rs.10 each called up, on which the holder has paid only application money of Rs.3 per
share. Out of these 500 shares were reissued at Rs.11 per share, fully paid up.
30. Pass Journal entries for the forfeiture and reissue of shares :
(i) X Ltd. Forfeited 200 shares of Ravi of Rs.10 each Rs. 8 called up, on which he had paid application and allotment
money of Rs. 3 per share. Out of these 100 shares were reissued as fully paid up for Rs.8 per share.
(ii) Y Ltd. forfeited 30 shares of Rs.10 each, Rs.7 called up for non-payment of first call of Rs.2 per share. Out of these
100 shares were immediately reissued at Rs.6 per share.
(iii) Z Ltd. Forfeited 600 shares of Rs.10 each on which first call of Rs.3 per share was not received; the second and final
call of Rs.2 per share has not yet been called. Out of these 200 shares were reissued as Rs.8 paid up for Rs.7 per share.
31. Pass Journal entries for forfeiture and Reissue of shares :
(i) A Ltd. Forfeited 1,000 shares of Rs.10 each Rs.7 called up, issued at a premium of 20%(to be paid at the time of
allotment) for non -payment of first call of Rs.2 per share. Out of these 600 shares were reissued asRs.7 paid up for Rs.4
per share.
(ii) B Ltd. Forfeited 1,000 shares of Rs.10 each, Rs.7 called up, issued at a premium of 20% (to be paid at the time of
allotment) for non-payment of allotment money of Rs.4 per share(including premium) and first call of Rs.2 per share.
Out of these 600 shares were reissued at Rs. 8 per share as fully paid.
(iii) C Ltd. Forfeited 800 shares of Rs.10 each issued at 30% premium (to be paid at the time of allotment) for non-
payment of first call of Rs.2 per share. The second and final call of Rs.2 has not yet been called. Out of these 200 shares
were reissued as Rs.8 paid up for Rs.8 per share.
(iv) D Ltd. Forfeited 800 shares of Rs.10 each issued at 30% premium for non- payment of allotment money of Rs.5 per
share (including premium) and first call of Rs.2 per share. The second and final call of Rs.2 has not been called. Out of
these 200 shares were reissued as fully paid up for Rs.11 per share.