KENDRIYA VIDYALAYA SANGATHAN – AHMEDABAD REGION

CH-8-1-COMPANY ACCOUNTS-SHARE CAPITAL

WORK SHEET 1
NAME OF STUDENT:
DATE:
Q.1 What do you mean by share capital of a company?
Ans

Q.2 Give two points of distinction between Reserve Capital and Capital Reserve.

Ans

Q.3 What do you mean by over subscription and under subscription of shares?
Ans

Q.4 What do you mean by calls in arrears and calls in advance?

Ans

Q.5 Sushma Limited purchased a business from Anamika Traders for a sum of Rs.
14,00,000 payable Rs. 2,00,000 by Cash and for the balance issued equity shares of
Rs. 100 each payable at a premium of 20%.
The assets and liabilities consisted of the following:
Rs.
Machinery 5,00,000
Building 5,00,000
Stock 4,00,000
Sundry Debtors 4,00,000
Sundry Creditors 3,00,000

Record necessary Journal entries in the books of Sushma Limited.

Ans Date Particulars LF Dr Cr.
Q.6 Anju Ltd. acquired Machinery worth Rs. 4,50,000 and Furniture Rs. 1,00,000 and
took over creditors worth Rs. 55,000 from Sanju Ltd. Anju Ltd. issued Equity shares
of Rs. 1,000 each at 10% premium as purchase consideration. Pass the necessary
journal entries in the books of the company.

Ans Date Particulars LF Dr Cr.

Q.7 The authorized capital of Ankit Ltd. is Rs. 20,00,000 divided into Rs. 2,00,000 equity
shares of Rs. 10 each. Out of these the company issued 1,00,000 equity shares of Rs.
10 each. The amount is payable as follows:
On application Rs. 2,
on allotment Rs. 4 and on final call Rs. 3
 The public applied for Rs. 90,000 equity shares and all the money was duly
received. How will you show the ‘Share Capital A/c’ in the Balance Sheet of the
company? Also prepare “Notes to Accounts” for the same.
Ans Balance Sheet of Ankit Ltd. as at ………………………

Notes to Accounts:
Note No. 1
Share Capital Amount

Q.8 On 1st April 2018, Ginni Filaments Ltd. was formed with an authorized capital of
₹10,00,000 divided into 1,00,000 Equity Shares of ₹10 each. The company issued
prospectus inviting applications for 90,000 equity shares. The company received
applications for 85,000 shares. During the first year, ₹8 were called. Vasu holding
1,000 shares &Vidhi holding 2,000 shares did not pay the first call of ₹2 per share.
Vidhi’s shares were forfeited after the first call and later on 1,500 of the forfeited
shares were reissued at ₹6 per share, ₹8 called up.
 Show share capital in the Balance Sheet of the company as per Schedule – III, Part –
I of the Companies Act, 2013. Also prepare notes to the Account for the same.
Ans Balance Sheet of Ginni Filaments Ltd. (An Extract)
As at 31st March, 2019
Particulars Note No. Amount
(₹)

Notes to Account: (Share Capital)

Particulars Amount
(₹)
 KENDRIYA VIDYALAYA SANGATHAN – AHMEDABAD REGION
CH-8-2-COMPANY ACCOUNTS-SHARE CAPITAL
WORK SHEET 2
NAME OF STUDENT:
DATE:
Q.1 State the provisions of section 52(2) of The Companies Act, 2013 regarding uses of
securities premium
Ans

Q.2 SK Ltd. re-issue 2,000 shares which were forfeited by crediting share forfeiture
account by ₹ 3,000. These shares were re-issued at ₹ 9 per share. The amount
transferred to capita reserve will be:
(a) ₹ 3,000 (b) ₹ 2,000 (c) ₹ 1000 (d) Nil
Ans

Q.3 Mukesh Ltd. Issued 50,000 shares of Rs. 10 each. Pass journal entries, when Shares
are issued at 10% premium.
Ans Date Particulars LF Dr Cr.

Q.4 Raghav Ltd. Forfeited 500 equity shares of Rs. 100 each for the non-payment of first
call of Rs. 30 per share. The final call of Rs. 10 per share was not yet made. The
forfeited shares were issued for Rs. 65,000 fully paid up. Pass the journal entries in
the books of Raghav Ltd.
Ans
Date Particulars LF Dr Cr.

Q.5 N Ltd. issued 2,000 shares of Rs100 each. All the money was received except on 200
shares on which only Rs90 were received. These shares were forfeited and out of the
forfeited shares 100 shares were reissued at Rs80 each as fully paid up. Pass necessary
journal entries for the forfeiture and reissue of shares.
Ans Date Particulars LF Dr Cr.

Q.6 Amrit Ltd. issued 50,000 shares of Rs 10 each at a premium of ₹ 2 per share payable
as ₹ 3 on application, ₹ 4 on allotment (including premium), ₹ 2 on first call and the
remaining on second call. Applications were received for 75,000 shares and a pro-rata
 allotment was made to all the applicants. All moneys due were received except
allotment and first call from Suman who applied for 1,200 shares. All his shares were
forfeited. The forfeited shares were reissued for ₹ 9,600. Final call was not made.
Prepare Cashbook and pass necessary journal entries

Ans Date Particulars LF Dr Cr.

Q.7 Velco Ltd. issued 30,000 shares of ₹ 10 each payable as ₹ 3 on application, ₹ 3 on

allotment, ₹ 2 on first Call and ₹ 2 on second call.

Applications were received for 40,000 shares and a pro-rata allotment was made to
the applicants of 35,000 shares. All money due were received except allotment and
first call from Mohit who had applied for 2,100 shares. His shares were forfeited
 after first call. Subsequently, the second call was duly made and duly received.
Thereafter, the forfeited shares were reissued for ₹ 9 fully paid. Pass the necessary
journal entries.

Ans Date Particulars LF Dr Cr.

 KENDRIYA VIDYALAYA SANGATHAN – AHMEDABAD REGION
CH-8-1-COMPANY ACCOUNTS-SHARE CAPITAL
WORK SHEET 1
NAME OF STUDENT:
DATE:
Q.1 What do you mean by share capital of a company?
Ans The capital of a joint stock company is divided into small units. Each unit is called a
share. Thus, all shares of a company taken together make share capital. The people or
organisations having shares of a company are called shareholders of a company.

Q.2 Give two points of distinction between Reserve Capital and Capital Reserve.

Ans 1. Capital Reserve is created out of capital profits whereas Reserve capital is a
part of uncalled capital.
2. Capital Reserve is shown in the Balance Sheet whereas Reserve Capital is not
shown in Balance Sheet.

Q.3 What do you mean by over subscription and under subscription of shares?
Ans 1. over-subscription number of shares applied is more than the shares offered
for subscription whereas in under-subscription number of shares applied is
less than the shares offered for subscription.
2. In over-subscription excess application money is to be refunded or adjusted
towards allotment whereas in under-subscription all the applications are
accepted, there is no excess money is to be refunded.
Q.4 What do you mean by calls in arrears and calls in advance?

Ans Calls in Arrear refers to that part of capital which has been called –up but not yet
been paid by the shareholders.
When a company accepts money paid by some of its allottees for the calls not yet
due, such amount is known as calls-in-advance.

Q.5 Sushma Limited purchased a business from Anamika Traders for a sum of Rs.
14,00,000 payable Rs. 2,00,000 by Cash and for the balance issued equity shares of
Rs. 100 each payable at a premium of 20%.

The assets and liabilities consisted of the following:

Rs.
Machinery 5,00,000
Building 5,00,000
Stock 4,00,000
Sundry Debtors 4,00,000
Sundry Creditors 3,00,000

Record necessary Journal entries in the books of Sushma Limited.

Ans Journal entries in the books of Sushma Limited

Machinery A/c …Dr. 5,00,000

 Building A/c … Dr. 5,00,000
Stock A/c … Dr. 4,00,000
Sundry Debtors A/c … Dr. 4,00,000
To Sundry Creditors A/c 3,00,000
To Anamika Traders A/c 14,00,000
To Capital Reserve A/c 1,00,000

Anamika Traders A/c … Dr. 2,00,000

To Cash A/c 2,00,000

Anamika Traders A/c … Dr. 12,00,000

To Equity Share Capital A/c 10,00,000
To Securities Premium Reserve A/c 2,00,000

Q.6 Anju Ltd. acquired Machinery worth Rs. 4,50,000 and Furniture Rs. 1,00,000 and
took over creditors worth Rs. 55,000 from Sanju Ltd. Anju Ltd. issued Equity shares
of Rs. 1,000 each at 10% premium as purchase consideration. Pass the necessary
journal entries in the books of the company.

Ans Journal entries

Machinery A/c ….Dr. 4,50,000
Furniture A/c ….Dr. 1,00,000
To Creditors A/c 55,000
To Sanju Ltd. A/c 4,95,000
Sanju Ltd. A/c …. Dr. 4,95,000
To Equity share capital A/c 4,50,000

To Securities Premium Reserve A/c 45,000

Q.7 The authorized capital of Ankit Ltd. is Rs. 20,00,000 divided into Rs. 2,00,000 equity
shares of Rs. 10 each. Out of these the company issued 1,00,000 equity shares of Rs.
10 each. The amount is payable as follows:

On application Rs. 2,
on allotment Rs. 4 and on final call Rs. 3
The public applied for Rs. 90,000 equity shares and all the money was duly
received. How will you show the ‘Share Capital A/c’ in the Balance Sheet of the
company? Also prepare “Notes to Accounts” for the same.

Ans Balance Sheet of Ankit Ltd. as at ………………………

 Particulars Note Amount Amount
No. (Rs.) (Rs.)
Current Previous
Year Year

Equity and Liabilities

(1) Shareholder’ Fund
(a) Share Capital 9,00,000
1

Notes to Accounts:
Note No. 1
Share Capital Amount

Authorized Capital
2,00,000 equity shares of Rs. 10 each 20,00,000

Issued Capital
1,00,000 equity shares of Rs. 10 each 10,00,000

Subscribed, but not fully paid

90,000 equity shares of Rs. 10 each 9,00,000

Q.8 On 1st April 2018, Ginni Filaments Ltd. was formed with an authorized capital of
₹10,00,000 divided into 1,00,000 Equity Shares of ₹10 each. The company issued
prospectus inviting applications for 90,000 equity shares. The company received
applications for 85,000 shares. During the first year, ₹8 were called. Vasu holding
1,000 shares &Vidhi holding 2,000 shares did not pay the first call of ₹2 per share.
Vidhi’s shares were forfeited after the first call and later on 1,500 of the forfeited
shares were reissued at ₹6 per share, ₹8 called up.

Show share capital in the Balance Sheet of the company as per Schedule – III, Part – I
of the Companies Act, 2013. Also prepare notes to the Account for the same.

Ans Balance Sheet of Ginni Filaments Ltd. (An Extract)

As at 31st March, 2019
 Particulars Not Amount
e (₹)
No.
I. EQUITY & LIABILITY
Shareholder’s Fund
Share Capital 1 6,77,000

Notes to Account: (Share Capital)

Particulars Amount
(₹)

Authorized Capital:
1,00,000 equity shares @ ₹ 10 each 10,00,000
Issued Capital:
90,000 equity shares of ₹ 10 each
Subscribed Capital: 9,00,000
Subscribed but not fully paid up
84,500 equity shares of ₹ 8 called up 6,76,000
Less: Calls in Arrear (1,000 x 2) 2,000
Add: Share Forfeiture A/C (500 x 6) 3,000 6,77,000
 KENDRIYA VIDYALAYA SANGATHAN – AHMEDABAD REGION
CH-8-2-COMPANY ACCOUNTS-SHARE CAPITAL-MS
WORK SHEET 2
NAME OF STUDENT:
DATE:
Q.1 State the provisions of section 52(2) of The Companies Act, 2013 regarding uses of
securities premium.
Ans (a) For buy back of equity shares.
(b) For issuing fully paid bonus shares to the shareholders of the company.
(c) For writing off the preliminary expenses.
For writing off commission or discount allowed on issue of shares or debentures of
the company.

Q.2 SK Ltd. re-issue 2,000 shares which were forfeited by crediting share forfeiture
account by ₹ 3,000. These shares were re-issued at ₹ 9 per share. The amount
transferred to capita reserve will be:
(a) ₹ 3,000 (b) ₹ 2,000 (c) ₹ 1000 (d) Nil
Ans C 1000
Q.3 Mukesh Ltd. Issued 50,000 shares of Rs. 10 each. Pass journal entries, when Shares
are issued at 10% premium.
Ans Journal entries
Bank A/c ….Dr. 5,50,000
To Share Application and allotment A/c 5,50,000
Share Application and allotment A/c …. Dr. 5,50,000
To Share capital A/c 5,00,000

To Securities Premium Reserve A/c 50,000

Q.4 Raghav Ltd. Forfeited 500 equity shares of Rs. 100 each for the non-payment of first
call of Rs. 30 per share. The final call of Rs. 10 per share was not yet made. The
forfeited shares were issued for Rs. 65,000 fully paid up. Pass the journal entries in
the books of Raghav Ltd.

Ans
Share Capital A/c …. Dr. 45,000
To Share First Call A/c 15,000
To Share Forfeiture A/c 30,000)
Bank A/c …. Dr. 65,000
To Share Capital A/c 50,000

To Securities premium Reserve A/c 15,000

Share Forfeiture A/c …. Dr. 30,000

To Capital Reserve A/c 30,000

Q.5 N Ltd. issued 2,000 shares of Rs100 each. All the money was received except on 200
shares on which only Rs90 were received. These shares were forfeited and out of the
forfeited shares 100 shares were reissued at Rs80 each as fully paid up. Pass necessary
journal entries for the forfeiture and reissue of shares.
Ans Date Particulars Debit₹ Credit₹
(i) Share capital A/C Dr 20,000
Calls-in- arrears A/C 2,000
Share forfeited A/C 18,000
(Being 200 shares forfeited)
(ii) Bank A/C Dr 8,000
Share forfeited A/C Dr 2,000
Share Capital A/C 10000
(Being 100 shares being reissued @80 as fully paid)
(iii) Share forfeited A/C Dr 7,000
To Capital Reserve A/C 7,000
(Being gain on forfeiture and reissue to capital
reserve)

Q.6 Amrit Ltd. issued 50,000 shares of Rs 10 each at a premium of ₹ 2 per share payable
as ₹ 3 on application, ₹ 4 on allotment (including premium), ₹ 2 on first call and the
remaining on second call. Applications were received for 75,000 shares and a pro-
rata allotment was made to all the applicants. All moneys due were received except
allotment and first call from Suman who applied for 1,200 shares. All his shares were
forfeited. The forfeited shares were reissued for ₹ 9,600. Final call was not made.
Prepare Cashbook and pass necessary journal entries

Ans Journal (In the books of Amrit Ltd.)

Particulars Amt (Dr.) ₹ Amt (Cr.) ₹

Share Application A/c Dr. 2,25,000

To Share Capital A/c 1,50,000
To Share allotment A/c 75,000
(Share application money
transferred to share capital account
and share allotment account)
Share Allotment A/c Dr. 2,00,000
To Share Capital A/c 1,00,000
To Securities Premium A/c 1,00,000
(Share Allotment money due with
premium)
Share 1st Call A/c Dr. 1,00,000
To Share Capital A/c 1,00,000
(Share 1st Call money due)
 Share Capital A/c Dr. 5,600
Securities Premium A/c Dr. 1,600
To Share allotment A/c 2,000
To Share 1st Call A/c 1,600
To Share Forfeiture A/c 3,600
(800 shares forfeited for non-
payment of allotment and 1st call
money)
Share Forfeiture A/c Dr. 3,600
To Capital Reserve A/c 3,600
(Balance of share forfeiture account
transferred to capital reserve
account)

Q.7 Velco Ltd. issued 30,000 shares of ₹ 10 each payable as ₹ 3 on application, ₹ 3 on

allotment, ₹ 2 on first Call and ₹ 2 on second call.

Applications were received for 40,000 shares and a pro-rata allotment was made to
the applicants of 35,000 shares. All money due were received except allotment and
first call from Mohit who had applied for 2,100 shares. His shares were forfeited
after first call. Subsequently, the second call was duly made and duly received.
Thereafter, the forfeited shares were reissued for ₹ 9 fully paid. Pass the necessary
journal entries.

Ans Journal (In the books of Velco Ltd.)

Particulars Amount Amount
(Dr.) ₹ (Cr.) ₹
Bank A/c Dr. 1,20,000
To Share Application A/c 1,20,000
(Share application money received)
Share Application A/c Dr. 1,20,000
To Share Capital A/c 90,000
To Share allotment A/c 15,000
To Bank A/c 15,000
(Share application money transferred
to share capital account and share
allotment account. Money refunded
on rejected shares)
Share Allotment A/c Dr. 90,000
To Share Capital A/c 90,000
(Share Allotment money due)
Bank A/c Dr. 71,400
To Share Allotment A/c 71,400
(Share Allotment money received
except calls in arrears)
Share 1st Call A/c Dr. 60,000
To Share Capital A/c 60,000
(Share 1st Call money due)
Bank A/c Dr. 56,400
st
To Share 1 Call A/c 56,400
(Share 1st Call money received except
calls in arrears)
Share Capital A/c Dr. 14,400
To Share Allotment A/c 3,600
To Share 1st Call A/c 3,600
To Share forfeiture A/c 7,200
(1,800 Shares forfeited after 1st call
for non-payment of allotment money
and 1st call)
Share 2nd& Final Call A/c Dr. 56,400
To Share Capital A/c 56,400
(Share 2nd& Final Call money due)
Bank A/c Dr. 56,400
nd
To 2 & Final Call A/c 56,400
(Share 2nd& Final Call money
received)
Bank A/c Dr. 16,200
Share Forfeiture A/c Dr. 1,800
To Share Capital A/c 18,000
(Forfeited shares reissued)
Share Forfeiture A/c Dr. 5,400
To Capital Reserve A/c 5,400
(Balance of share forfeiture account
transferred to capital reserve account)