SUBECT: ACCOUNTANCY

CLASS: XII (SESSION 2020-21)

UNIT 3 – ACCOUNTING FOR COMPANIES
Revision Sheet for PP1

Q1) 4000 Shares of 20 on which 14 has been called and 10 has been paid,are forfeited out of
these, 3000 shares are re-issued for 18 as fully paid. What is the amount to be transferred to
Capital Reserve Account?
a) 12000 b) 15000 c) 24000 d) 17000
Q2) Can a company issue shares at a premium in the absence of any express authority in its articles?
Q3) Is forfeited shares can be reissued at premium. To which account premium received on reissued shares
is credited.
Q4) What is the maximum permissible discount at which forfeited shares can be reissued?

Q5) 500 shares of face value Rs, 10 issued at premium Rs. 2 Rs, 8 called up forfeited for non payment of
first call Rs 2. Calculate amount of discount at which shares can be reissued.
a) 8 per share c) 2 per share
b) 10 per share d) 6per share
Q6) 150 shares of face value 100 issued at premium 10 Included in allotment money 70 called up
forfeited for nonpayment of allotment money 50. Calculate amount debited to securities premium A/c
for forfeiture.
(a) 10,500 (b) 7,500 (c) 1,500 (d) 15,000
Q7) 250 shares of face value 10 issued at premium 2. 8 called up forfeited for nonpayment of first call
2. Calculate amount debited to share capital a/c for forfeiture.
a) 2,000 b) 1,500 c) 2,500 d) 3,000
Q8) Why securities premium money cannot be used for payment of cash dividend among shareholders?

Q9) Krishna Ltd. With paid-up share capital of 60,00,000 has a balance of 15,00,000 in securities
premium account. The company management does not want to carry over this balance. You are required
to suggest the method for utilizing this premium money that would achieve the objectives of the
management and maximize the return to shareholders.

Q10) Security Premium Reserve is a specific reserve which should be used for particular purposes. Enumerate
the uses of Security Premium Reserve.

Q11) Differentiate between Reserve capital and Capital Reserve on the basis of time when it can be used.

Q12) State True or False:-

 Reserve Capital is a part of Unsubscribed Capital.
 A maximum interval of one month should be there between two calls.
Q13) What is the maximum rate of interest which the board of directors of a company can normally pay on
calls-in-advance if the articles are silent on the matter of such interest?

Q14) Exe Ltd. has 10,000 debit balance in Calls in Arrears A/c and also 10,000 credit balance in Calls in
Advance A/c. The Accountant has prepared a Balance Sheet and has not shown two balances on the
 ground that the two accounts relate to Share Capital and have thus been set off against each other, do you
think the Accountant is correct? Give your reasons.
Q15) A company issued 3,000 equity shares of 10 each at 10% premium. These shares were forfeited for the
non payment of final call of 4 per share. Later on out of these, 1800 shares were reissued at 7 per
share as fully paid. What will be the amount credited to Capital Reserve?
Q16) Zee Ltd. forfeited 300 shares of 10 each issued at 20% premium ( 9 called up including premium) on
which 4 of allotment (including premium) and first call of 2 has not been received. Out of these, 100
shares were reissued as fully paid up for 6 per share. What is the amount to be transferred to Capital
Reserve?
Q17) How does issued capital differ from Authorized capital?
Q18) Tinkoo Limited issued to the public for subscription 20,000 shares of 10 each at a premium of 20%
payable as
3 each on Application, Allotment, First call and Second & Final Call (premium is equally called on
Application and Allotment)
Applications were received for 30,000 and allotment was made pro-rata to 80% of applicants. Mr. David
to whom 800 shares were allotted paid only the application money, and Mr. Kuku who had applied for
1,200 shares paid the entire call money due along with the allotment.
Give journal entries. Prepare calls in arrear and calls in advance A/cs.
Q19) A Ltd. offered 1,60,000 shares to public for subscription. Applications were received for 3,00,000 shares
and pro rata allotment made to 80% applicants. Ramesh applied for 84,000 shares and Mahesh was
allotted 32,000 shares
On the basis of above information, calculate:-
i) How many applications have been rejected?
ii) What is pro rata ratio? 2,40,000: 1,60,000 = 3:2
iii) How many shares allotted to Ramesh?
iv) How many shares were applied by Mahesh?

Q20) Unique Ltd. issued 50,000 equity shares of 10 each, payable 3 on Application; 4 on Allotment and
4 on First & Final call. Applications were received for 72,000 shares. It was decided that:-
i) To refuse the allotment to the applicants of 12,000 shares.
ii) Ramesh, a promoter of the company, applied for 20,000 shares allotted in full.
iii) To allot the remaining shares on pro rata basis.
When the company called allotment, Ramesh paid his call money also along with the allotment and a
shareholder holding 1800 shares failed to pay allotment,
Calculate the total amount received on allotment.

Q21) Eee ltd. forfeited 200 shares of 10 ( 8 called up) on which the holder had paid application and
allotment money of 5 per share. Out of which 50 shares were reissued to F Ltd. As fully paid for 8 per
share. Journalize.
Q22) Aptech Ltd. Forfeited 300 shares of 10 each, on which first call of 3 per share was not received, the
second and final call of 2 per share has not yet been called. Out of these 75 shares were reissued to G as
8 paid up for each share. Journalize.
Q23) The directors of M Ltd. resolved that 2000 equity shares of 10 each, on which 7.50 was paid, be
forfeited for non-payment of final call of 2.50, out of these 1800 shares were reissued as fully paid for
6 per share. Journalize.
Q24) Y Ltd. Forfeited 100 shares of 100 each issued at 20% premium for non-payment of first call of 30
per share & second call of 20 per share. Out of these 40 shares were reissued as fully paid up for 90
per share. Journalize.
Q25) HI Ltd. Forfeited 10 shares of 10 each ( .6 called up) to Mr. Y on which he had paid only application
money of 2 per share. Out of these, 8 shares were reissued to Z as 8 called up for 9 per shares.
Journalize.
Q26) The company forfeited 500 shares of 10 each, issued on which 3 has been paid. Final call of 2 per
shares was not yet made. Out of these company re-issued 400 shares for maximum possible discount, as
fully paid up. Journalize.
Q27) Koka Limited issued 48,000 shares which were subscribed for by the public and during the first year .5
per share was called up payable .2 on application, .1 on allotment, .1 on first call and .1 on second
call.The amount received in respect of these shares were as follows:
On 36,000 shares full amount called
On 7,500 shares c .4 per share
On 3,000 shares .3 per share
On 1,500 shares .2 per share
The director forfeited 4,500 shares on which less than 4 per share has been paid and reissued at .3 per
share as .5 paid up. Prepare Shares Forfeiture A\c.
Q28) Complete the following Journal entries:-
Date Particulars Amt Amt

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

Securities Premium Reserve A/c Dr. ………
To Forfeited Shares A/c ……
To Share Allotment A/c ……..
(3,000 shares of 100 each forfeited for non-payment of
allotment of 45 each including premium @ 5 per
share )
….…
………………………………………… Dr. ……....
………………………………………… Dr. ……
To …………………………………………..
(Reissue of 2,000 forfeited shares at 60 per share, 75
paid up )
……...
…….
…………………………………………… Dr.
To ……………………………………
(………………………………………………………)

Q29) Complete the following account:-

Dr. Forfeited Shares A/c Cr.
Particulars
Particulars

To Share Capital 2,000 By Share Capital 15,000

(Discount on reissue of 200 (Amount forfeited on
shares) __?___ 500 shares)
To _____________?_______ __?___
To Balance c/d

__?___ __?___

Q30) ABC Ltd. Issued 30,000 shares of 200 each for 350 each payable
On Application 150 (including premium 100)
On Allotment 100 (including premium 50)
Balance on first and final call
Public subscribed for 45,000 shares. Letters of regrets send to the applicants of 5,000 shares and
remaining were allotted on pro rata basis.
Mr. Gautam holding 3,000 shares failed to pay allotment and his shares were immediately forfeited before
call.
Mr. Rakshit who applied for 1,600 shares failed to pay call and his shares were also forfeited.
2,000 shares of Mr. Gautam and 1,000 shares of Mr. Rakshit reissued @ 250 each as fully paid up to Mr.
Bakshi.
Pass necessary journal entries.