Please refer to Accounting for Share Capital Class 12 Accountancy Exam Questions provided below. These questions and answers for Class 12 Accountancy have been designed based on the past trend of questions and important topics in your class 12 Accountancy books. You should go through all Class 12 Accountancy Important Questions provided by our teachers which will help you to get more marks in upcoming exams.
Class 12 Accountancy Exam Questions Accounting for Share Capital
Class 12 Accountancy students should read and understand the important questions and answers provided below for Accounting for Share Capital which will help them to understand all important and difficult topics.
SHORT ANSWER TYPE QUESTIONS :
Question. Guru limited invited applications for 500000 equity shares of Rs.10/- each at a premium of Rs.5/- per share. Because of favourable market conditions, the issue was over subscribed. Suggest the alter-natives available to the Board of Directors for the allotment of shares.
Answer : A. First alternative. Rejection of excess application
B. Second alternative. Pro rata allotment
c. Third alternative . Rejection and Pro rata allotment.
Question. What do you mean by minimum subscription?
Answer : Minimum subscription is the minimum amount to be received by the subscription of shares within the prescribed period. If the minimum subscription is not received within the prescribed period, the application money received will be returned to the applicants within 15 days of clo-sure of the issue. Minimum subscription is 90% of the issued capital.
Question. A company issued 40,000 preference shares of ₹ 100 per share at par payable as under: On Appli-cation : 20% On Allotment : 40% On First & Final Call : balance Applications were received for 50,000 shares. Allotment was made on pro-rata basis. How much amount will be received in cash on allotment?
Answer : Rs.14,00,000
Question. State any three purposes other than issue of bonus shares for which securities premium can be utilised.
Answer : a. To write off preliminary expenses
b. to purchase its own shares
c. To write off discount or loss on issue of shares/debentures
d. To pay premium payable on the redemption of redeemable preference shares or deben-tures.
Question. Rajesh Ltd purchased land costing Rs.9,50,00000/- from YLtd Rs.50,00,000 were paid through bank and the balance by issuing equity shares of rs.100 each at a premium of 50% . Pass the necessary journal entries for making payment through bank and by issue of equity shares.
Answer : No of shares issued = 90000000/150=600000
Question. Love India Ltd is registered with an authorised capital of 10,00,000 divided into 1,00,000 equity shares of 10 each. The company issued 50,000 equity shares at a premium of Rs.5 per share. Rs.2/ per share payable with application, Rs.8/-per share ( including premium) on allotment and the balance amount on first and final call. The issue was fully subscribed and all the amount due was received except the first and final call money on 500 shares allotted Balaram. Present the Share capital in the Balance Sheet of Love India Ltd as per Schedule III, part I of the Companies Act,2013. Also prepare Note to Accounts for the same.
Question. What is meant by Private Placement of share?
Answer : It means allotment of shares to a select group of persons privately and not to public in general through public issue.
Question. What is meant by Preferential Allotment of Shares?
Answer : Preferential Allotment of Shares is one that is made at a predetermined price to the identi-fied people, such as promoters, venture capitalists, financial institutions, buyers of company’s products or its suppliers, who wish to take a strategic stake in the company.
Question. Distinguish between reserve capital and capital reserve.
Question. Read the information given below and give the answer for the questions 15 to 18: Exe Ltd issued 50,000 shares of ₹ 100 per share for public subscriptions at 20% premium. Amount payable as under: On Application : ₹ 40 per share (including 10% premium) On Allotment : ₹ 40 per share (excluding 10% pre-mium) On First & Final Call : ₹ Balance Application received for 75,000 shares. Allotment was made to 60,000 share applicants. All due money was duly received except from a shareholder (Amal) allotted to whom 12,000 shares, failed to pay allotment and calls. These shares were forfeited.
a.Write the amount of excess application money adjusted on allotment?
b. What the amount received on allotment?
c. How much amount did not receive on allotment?
d. What the amount forfeited on 12,000 shares?
Answer : (a) 4,00,000
(b) ₹ 15,96,000
(c) ₹ 5,04,000
(d) ₹ 4,56,000
LONG ANSWER TYPE QUESTIONS :
Question. A . X. Ltd forfeited 10 shares of 10 each, Rs.7 called up on which shareholders had paid application and allotment money of Rs.5 per share. Out of these 8 shares were reissued to Y for Rs.8 per share at Rs.8 paid up. Record the journal entries for forfeiture and re-issue of shares by opening calls-in arrears and calls in advance accounts.
B. L. Ltd forfeited Mr. M’s shares who had applied for 600 shares and was allotted 400 shares failed to pay allotment money of Rs.4 per share including premium of Rs.2 on which he had paid application money of Rs.2 only. Pass journal entries for forfeiture of shares by opening calls in arrears and calls in advance accounts.
Question. ABC Ltd forfeited 150 shares of Rs.10 each issued at a premium of Rs.5 per share, for non payment of allotment of Rs.8 per share including premium of Rs.5 per share), the first call of Rs.2 pershare and the final call of Rs.3 per share. Out of these,100 Equity shares were reissued at Rs.14/share.
Give journal entries to record forfeiture and re- issue.
Question. XYZ Ltd purchased machinery of Rs.430000 from perfect machines Ltd and paid as follows.
a. Issued 10000 equity shares of Rs.10 each at a premium of Rs.3
b. Issued an acceptance of Rs.100000 payable after 3 months.
c. Balance by issuing post-dated cheque of two month of Rs.200000
Pass journal entries in the books of XYZ Ltd and Perfect Machines Ltd
Question. DN Ltd issued 50000 shares of Rs.10 each payable as Rs.2 per share on application, Rs. 3 on allotment, and Rs.5 on first and final call. Applications were received for 70000 shares. It was decided that
a.to refuse allotment to the applicants for 10000 shares
b.to allot 20000 shares to Mohan who had applied for similar number and
c.to allot the remaining shares on pro rata basis
Mohan failed to pay the allotment and Sohan who belonged to category ‘c’ and was allotted 3000 shares paid the call money with allotment.
Calculate the amount received on allotment.
Question. Bombay Limited invited applications for issuing 100000 Equity shares of Rs.10 each at a premium of Rs.10 per share. The amount was payable as follows:
On applicationRs.10 per share (including Rs.5premium)
On allotment the balance
The issue was over subscribed. A shareholder holding300 shares paid the full share money with application. Another shareholder holding 200 shares failed to pay the allotment money. His shares were forfeited. Later on, these shares were reissued for Rs.4000/- as fully paid. Pass necessary journal entries for the above transactions in the books of Bombay Ltd.
Question. Pooram Ltd forfeited 2000 shares of rs.10 each, fully called up, on which they have received only Rs.14000. 50 of the forfeited shares were reissued for Rs.9 per share fully paid up.
Pass journal entries for forfeiture and re-issue of shares. Also prepare share forfeited a/c.
Question. Mam Ltd issued 50000 shares of Rs.100 each payable as Rs.20 on application, Rs. 40 on allotment and Rs.20 each on two calls. Applications were received for 75000 shares. Applications of 25000 shares were sent letters of regret and application money was refunded.
Mohan, a holder of 1500 shares failed to pay allotment money which he paid along with the first call. Raman, a shareholder , holding 500 shares paid both the calls along with allotment. Kamal, a shareholder, holding 1000 shares did not pay first call and second and final call. His shares were forfeited. The forfeited share were reissued atRs.120 per share as fully paid up.
Pass necessary journal entries for the above transactions in the books of the compan . The company maintains calls in arrears account.
Question. Sun star Ltd invited applications for issuing 200000 equity share of Rs.50 each. The amount was payable as follows.
On application Rs.15/share, on allotment Rs. 10 per share, on first and final call Rs.25/share. Applications for 300000 shares were received. Allotment to the applications were made as follows.
Excess money received with application was adjusted towards sums due on allotment and calls. Namita, a shareholder of category I , holding 3000 shares failed to pay the allotment money. Her shares were forfeited immediately after allotment. Manav , a shareholder of category II, who had applied for 1000 shares failed topay the first and final call. His shares were also forfeited. All the forfeited shares were reissued at Rs.60/share , fully paid up.
Pass necessary journal entries and prepare cash book for the above transactions.
Question. Fill in the blank spaces in the journal entries given below.
Question. ABC Ltd is registered with an authorised capital of Rs. 80000000 divided into equity shares of Rs.12 each. Subscribed and fully paid up share capital of the company was Rs.40000000. For providing employ-ment to the local youth and for the development of rural area of Jammu and Kashmir state, the company decided to set up a food processing unit in Anantnag District. The company also decided to open skill development centres in Ladakh, Srinagar and Punch. To meet its new financial requirements, the company decided to Issue 100000 equity shares of Rs 10 each and 10000, 9% Debentures of Rs.100 each. Te deben-tures were redeemable after 5 years. The issue of equity shares and debentures was fully subscribed. A shareholder holding 1000 shares failed to pay the final call of Rs 2/share. Present the share capital in the Balance sheet of the company as per the provisions of schedule III of te Companies Act 2013.