Class 12 Accountancy Part 2 Chapter 1: Accounting for Share Capital (Issue of Shares) NCERT Solutions

The chapter Accounting for Share Capital explains how a company raises funds by issuing shares and how each stage of that process application, allotment, and calls  is recorded in the books. Questions in this chapter can involve straightforward issue of shares, oversubscription requiring pro-rata allotment, shareholders who default on calls, and forfeited shares that are later re-issued at par, premium, or discount.

Understanding the accounting treatment at each stage is important because board exam questions often combine two or three of these situations in a single problem. The Class 12 Accountancy Chapter 1 NCERT Solutions below provide step-by-step solutions to selected important questions so you can follow the calculations and understand how each entry is passed.

Important Numericals: Accounting for Share Capital Class 12 NCERT Solutions

The following solutions cover important numerical questions from Chapter 1. Use them to revise the accounting treatment and check your approach after attempting each question yourself.

Question 1

Vidya Ltd issued 40,000 equity shares of Rs. 10 each payable as Rs. 3 on application, Rs. 4 on allotment and Rs. 3 on first and final call. All the shares were subscribed and duly paid. Pass the necessary journal entries.

Solution:

Amount received on application:
= 40,000 × Rs. 3 = Rs. 1,20,000

Amount due on allotment:
= 40,000 × Rs. 4 = Rs. 1,60,000

Amount due on first and final call:
= 40,000 × Rs. 3 = Rs. 1,20,000

Journal Entries:

Answer: Total Share Capital raised = Rs. 4,00,000.

Question 2

Kamna Ltd issued 25,000 shares of Rs. 100 each at a premium of Rs. 20 per share, payable Rs. 30 on application, Rs. 60 on allotment (including premium) and the balance on the first call. All money was received. Pass journal entries.

Solution:

Application money:
= 25,000 × Rs. 30 = Rs. 7,50,000

Allotment money (including premium):
= 25,000 × Rs. 60 = Rs. 15,00,000

Balance due on call:
= (100 + 20) − 30 − 60 = Rs. 30 per share
= 25,000 × Rs. 30 = Rs. 7,50,000

Journal Entries:

Answer: Securities Premium collected = Rs. 5,00,000; total amount received = Rs. 30,00,000.

Question 3

Nishtha Ltd invited applications for 50,000 shares of Rs. 10 each. Applications were received for 65,000 shares. The directors decided to allot on a pro-rata basis to all applicants. Excess application money was adjusted towards allotment. Calculate the amount to be refunded or adjusted and pass the entry for application money.

Solution:

Shares applied = 65,000
Shares allotted = 50,000

Application money received:
= 65,000 × Rs. 3 = Rs. 1,95,000

Application money required for allotted shares:
= 50,000 × Rs. 3 = Rs. 1,50,000

Excess application money:
= 1,95,000 − 1,50,000 = Rs. 45,000

Since allotment was pro-rata to all applicants, the excess of Rs. 45,000 is adjusted towards the sum due on allotment, and no refund is necessary.

Journal Entry:

Answer: Excess application money of Rs. 45,000 adjusted against allotment.

Question 4

Ranjeet Ltd offered 20,000 shares of Rs. 10 each for public subscription. Applications were received for 20,000 shares, but a shareholder holding 400 shares failed to pay the allotment money of Rs. 3 per share and the call money of Rs. 2 per share. Pass the journal entry for calls in arrears, assuming the company maintains a Calls in Arrears Account.

Solution:

Allotment money not received:
= 400 × Rs. 3 = Rs. 1,200

Call money not received:
= 400 × Rs. 2 = Rs. 800

Total calls in arrears:
= Rs. 1,200 + Rs. 800 = Rs. 2,000

Journal Entry:

Answer: Calls in Arrears = Rs. 2,000.

Question 5

Preeti Ltd forfeited 500 shares of Rs. 10 each, Rs. 8 called up, for non-payment of the first call of Rs. 3 per share. The application and allotment money of Rs. 5 per share had already been received. These shares were later re-issued at Rs. 7 per share, Rs. 8 paid up. Pass journal entries for forfeiture and re-issue.

Solution:

Amount already received on forfeited shares:
= 500 × Rs. 5 = Rs. 2,500

Amount called up but not received (first call):
= 500 × Rs. 3 = Rs. 1,500

Journal Entry for Forfeiture:

Loss on re-issue:
= 500 × (8 − 7) = Rs. 500

Journal Entry for Re-issue:

Balance in Share Forfeiture Account transferred to Capital Reserve:
= 2,500 − 500 = Rs. 2,000

Journal Entry:

Answer: Capital Reserve = Rs. 2,000.

Question 6

Ashoka Ltd issued 30,000 shares of Rs. 100 each at a premium of Rs. 10 per share, payable Rs. 30 on application, Rs. 50 on allotment (including premium) and the balance on the first and final call. A shareholder holding 300 shares did not pay the allotment and call money. His shares were forfeited after the call was made. Pass journal entries for forfeiture.

Solution:

Amount received from defaulting shareholder on application:
= 300 × Rs. 30 = Rs. 9,000

Amount not received on allotment (including premium):
= 300 × Rs. 50 = Rs. 15,000

Amount not received on first and final call:
= 300 × Rs. 30 = Rs. 9,000

Since the premium of Rs. 10 per share included in allotment was never received, Securities Premium is not credited for these shares.

Journal Entry for Forfeiture:

Answer: Amount forfeited and transferred to Share Forfeiture A/c = Rs. 9,000.

Question 7

Bharat Ltd issued 10,000 shares of Rs. 10 each at a discount of 5%, payable in full on application. All shares were subscribed and money received. Pass the journal entries, keeping in mind that shares can be issued at a discount only under the conditions permitted by law for sweat equity shares.

Solution:

Face value:
= 10,000 × Rs. 10 = Rs. 1,00,000

Discount:
= 5% of Rs. 1,00,000 = Rs. 5,000

Net amount received:
= Rs. 1,00,000 − Rs. 5,000 = Rs. 95,000

Journal Entry:

Answer: Discount on Issue of Shares = Rs. 5,000.

Question 8

Ganga Ltd forfeited 200 shares of Rs. 10 each, fully called up, held by a shareholder who did not pay the allotment money of Rs. 3 and the first and final call of Rs. 4. These shares were re-issued at Rs. 12 per share fully paid up. Pass journal entries.

Solution:

Amount received on application:
= 200 × Rs. 3 = Rs. 600

Amount not received (allotment + call):
= 200 × (3 + 4) = Rs. 1,400

Journal Entry for Forfeiture:

Gain on re-issue:
= 200 × (12 − 10) = Rs. 400, credited to Securities Premium since re-issue is at a price above face value.

Journal Entry for Re-issue:

Balance in Share Forfeiture Account transferred to Capital Reserve:
= Rs. 600 (fully, since shares were re-issued at a gain, not a loss)

Journal Entry:

Answer: Capital Reserve = Rs. 600.

Question 9

Divya Ltd invited applications for 15,000 shares of Rs. 10 each payable Rs. 5 on application. Applications were received for 18,000 shares. The directors rejected applications for 1,000 shares and refunded the money, and allotted the remaining shares on a pro-rata basis. Calculate the refund and the amount adjusted towards allotment.

Solution:

Shares applied = 18,000
Shares rejected = 1,000
Shares available for pro-rata allotment = 17,000
Shares allotted = 15,000

Refund on rejected applications:
= 1,000 × Rs. 5 = Rs. 5,000

Application money received on pro-rata group:
= 17,000 × Rs. 5 = Rs. 85,000

Application money required for shares allotted:
= 15,000 × Rs. 5 = Rs. 75,000

Excess adjusted towards allotment:
= 85,000 − 75,000 = Rs. 10,000

Answer: Refund = Rs. 5,000; amount adjusted towards allotment = Rs. 10,000.

Question 10

Meera Ltd called up Rs. 8 per share on 12,000 shares of Rs. 10 each. All shareholders paid the amount due, except one holding 100 shares who paid the entire Rs. 10 per share in advance. Pass the journal entry for calls in advance, assuming interest is not yet due.

Solution:

Amount called up:
= 12,000 × Rs. 8 = Rs. 96,000

Amount received in advance from one shareholder:
= 100 × (10 − 8) = Rs. 200

Journal Entry:

Answer: Calls in Advance = Rs. 200, to be adjusted against the next call when it is made.

Accounting for Share Capital Class 12 NCERT Solutions PDF

If you want to revise all the selected solutions together, you can use the  Accounting for Share Capital Class 12 NCERT Solutions PDF.  Download the PDF and refer to the detailed solutions while practising the chapter.

How to Use Chapter 1 Accountancy NCERT Solutions for Revision?

Solving the questions yourself before checking the solutions can make your revision more useful.

• Attempt Before Checking: Try each numerical on your own before referring to the solution.

• Check the Adjustments: Pay attention to how goodwill, revaluation, reserves, and other adjustments are treated.

• Understand the Working Notes: Do not skip the calculations used to arrive at the final amount.

• Review Your Mistakes: Compare your working with the solution and identify where your approach differed.

• Practise Similar Questions: After understanding a solution, attempt another question based on the same concept.

Practising important numericals can help you understand how application, allotment, calls, and forfeiture combine in Issue of Shares questions.

Use the Class 12 Accountancy Chapter 1 NCERT Solutions to check your calculations, understand the working steps, and revise the chapter before your exams.