Solutions Issue of Shares TS Grewal Class 12 [2025-26]

Question Nos. 1 to 6

Question 1:
Global Trade Ltd. has authorised share capital of ₹ 1,00,00,000 divided into 1,00,000 Equity Shares of ₹ 100 each. It has existing issued and paidup capital of ₹ 25,00,000. It further issued to public 25,000 Equity Shares at a premium of 20% for subscription payable as under:

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On Application	₹ 30
On Allotment	₹ 60, and
On Call	Balance Amount

The issue was fully subscribed and allotment was made to all the applicants. The company did not make the call during the year.
Show Share Capital in the Balance Sheet of the Company.

Solution

Particulars	Notes	₹
I. Equity and Liabilities \(\quad\) Equity Shareholder’s fund \(\quad\quad\) Share Capital		4,25,000

Notes to Accounts

Particulars	₹
I. Share Capital \(\quad\) Authorised Capital \(\quad\) 1,00,000 Equity Shares of 100 each \(\quad\) Issued Capital \(\quad\) 50,000 Equity Shares of 100 each \(\quad\) Subscribed Capital \(\quad\) Subscribed Fully Paid up \(\quad\) 25,000 Equity Shares of 100 each \(\quad\) Subscribed Not Fully Paid up \(\quad\) 25,000 Equity Shares of 100 each, 70 called up	1,00,00,000 50,00,000 25,00,000 17,50,000 42,50,000

Question 2:
Shri Ganga Ltd. was registered with an authorised capital of ₹ 7,00,000 divided into equity shares of ₹ 10 each. It offered to the public for subscription 50,000 equity shares. The amount payable as follows:

On Application	₹ 4 per share
On Allotment	₹ 4 per share
On First and Final call	Balance

The issue was fully subscribed. All the amounts were duly received except the first and final call money on 4,000 equity shares.
Show the Share Capital in the Balance Sheet of the company as per Schedule III, Part I of the Companies Act, 2013. Also prepare ‘Notes to Accounts’ for the same.

Question 3:
Sunstar Ltd. has an authorised capital of ₹ 20,00,000 divided into equity shares of ₹ 10 each. The company invited applications for issuing of 60,000 shares. Applications were received for 58,000 shares.
All calls were made and were duly received except the final call of ₹ 3 per share on 2,000 shares. These shares were forfeited.
Present the ‘Share Capital’ in the Balance Sheet of the Company as per Schedule III, Part I of the Companies Act, 2013. Also prepare ‘Notes to Accounts’ for the same.

Question 4:
Star Ltd. is registered with capital of ₹ 50,00,000 divided into 50,000 equity shares of ₹ 100 each. The Company issued 25,000 equity shares for subscription. Subscription was received for 23,750 shares and all the due amount was duly received, except the first and final call of ₹ 20 per share on 600 shares. Show the ‘Share capital’ in the Balance Sheet of the company.
Note: Problems related to Disclosure of Share Capital in Company’s Balance Sheet are also given under the head issue of shares at par and at premium.

Question 5:
Grand Hotels Ltd. had authorised capital of ₹ 50,00,000 divided into 50,000 Equity Shares of ₹ 100 each. It issued 10,000 Equity Shares to public for subscription on the following terms:
On Application ₹ 40 per share
On Allotment ₹ 30 per share
Balance on First and Final Call.
Shares were fully subscribed and amounts called were duly received. First and Final call was not yet made.
Prepare Balance Sheet of the company showing Share Capital.

Question 6:
Altaur Ltd. was registered with an authorised Capital of ₹ 4,00,00,000 divided in 25,00,000 Equity Shares of ₹ 10 each and 1,50,000, 9% Preference Shares of ₹ 100 each. The company issued 8,00,000 Equity Shares for public subscription at 20% premium, payable ₹ 3 on application; ₹ 7 on allotment (including premium) and balance on call. Public had applied for 10,00,000 shares. Excess Applications were sent letters of regret.
All the dues on allotment were received except on 15,000 shares held by Sanju. Another shareholders Rocky paid his call dues along with allotment on his holding of 25,000 shares. You are required to prepare the Balance Sheet of the company as per Schedule III of Companies Act, 2023, showing Share Capital Balance and also prepare Notes to Accounts.

Solutions Issue of Shares TS Grewal Class 12 [2025-26]

Question No. 7 to 10

Question 7:
Excel Ltd. was registered with capital of ₹ 5,00,000 divided into 50,000 Equity Shares of ₹ 10 each. It issued 20,000 Equity Shares to public for subscription. The shares were subscribed and calls were made and received except first and final call of ₹ 2 on 500 shares held by Varun.
Prepare Balance Sheet of the company showing Share Capital.

Question 8:
Red Roses Ltd. was registered with capital of ₹ 25,00,000 divided into 25,000 Equity Shares of ₹ 100 each. It issued 15,000 Equity Shares to public for subscription. The shares were subscribed and calls were made and received except allotment money of ₹ 40 on 100 shares held by Parul and first and final call of ₹ 20 on 500 shares, including shares held by Parul.
Prepare Balance Sheet of the company showing Share Capital.

Question 9:
East India Hotels Ltd. was registered with authorised capital of ₹ 25,00,000 divided into 2,50,000 Equity Shares of ₹ 10 each. It issued 1,50,000 Equity Shares to public for subscription. The shares were subscribed and calls were made and received. First and final call of ₹ 3 was not made. Paresh holder of 5,000 shares paid the call money along with the allotment money.
Prepare Balance Sheet of the company showing Share Capital.

Question 10:
Amit Ltd. was registered with a capital of ₹ 5,00,000 in shares of ₹ 10 each and issued 20,000 such shares at a premium of ₹ 2 per share, payable as ₹ 2 per share on application, ₹ 5 per share on allotment (including premium) and ₹ 2 per share on first call made three months later. All the money payable on application and allotment was duly received but when the first call was made, one shareholder paid the entire balance on his holding of 300 shares and another shareholder holding 1,000 shares failed to pay the first call money.
Pass Journal entries to record the above transactions and show how they will appear in the company’s Balance sheet.

Solutions Issue of Shares TS Grewal Class 12 [2025-26]

Issue of Shares for Cash at Par

Questions Nos. 11 to15

Question 11:
Nidhi Ltd. issued 2,50,000 Equity Shares of ₹ 10 each to public at par for subscription, amount being payable as application money. Pass necessary Journal entries in the books of the company.

Question 12:
Authorised Capital of ₹ 16,00,000 of Bharat Ltd. is divided into 1,60,000 Equity Shares of ₹ 10 each. Out of these shares, 80,000 Equity Shares were issued at par to public for subscription. The issue price is payable on application. All the shares were subscribed.
Pass necessary Journal entries in the books of the company.

Question 13:
Alok Leathers Ltd. invited applications for 10,000 shares of ₹ 100 each payable as follows:
₹ 30 on application, ₹ 30 on allotment and balance on first and final call.
All the shares were applied and allotted and the money was duly received.
You are required to Journalise these transactions and show share capital in the Balance Sheet.

Question 14:
National Textiles Ltd. was registered with the authorised capital of ₹ 3,00,000 divided into 3,000 shares of ₹ 100 each, which were offered to the public. Amount payable as ₹ 300 per share on application, ₹ 40 per share on allotment and ₹ 30 per share on first and final call. These shares were fully subscribed and all money was duly received.
Prepare Cash Book, Journal and Balance Sheet showing Share Capital.

Question 15:
Modern Diaries Ltd. was registered with an authorised capital of ₹ 10,00,000 divided into 7,500 Equity Shares of ₹ 100 each and 2,500 Preference Shares of ₹ 100 each each. 1,000 Equity Shares and 500; 9% Preference Shares were offered to public on the following terms – Equity Shares payable ₹ 10 on application, ₹ 40 on allotment and the balance in two calls of ₹ 25 each. Preference Shares are payable ₹ 25 on application, ₹ 25 on allotment and ₹ 50 on first and final call. All the shares were applied for and allotted. Amount due was duly received.
You are required to prepare Cash Book, pass necessary Journal entries and show share capital in the Balance Sheet.

Solutions Issue of Shares TS Grewal Class 12 [2025-26]

Issue of Shares for Cash at Premium

Question No. 16 to 18

Question 16:
Premio Ltd. issued 50,000 Equity Shares of ₹ 100 each at a premium of ₹ 50 per share, payable as follows:
₹ 100 per share on Application; and
Balance on Allotment.
The issue was subscribed and shares were issued to the applicants. Pass the necessary Journal entries.

Quesiton 17:
Bharat Ltd. was incorporated with a capital of ₹ 20,00,000 divided into shares of ₹ 10 each, 20,000 shares were offered for subscription and out of these, 18,000 shares were applied for and allotted. ₹ 3 per share (including ₹ 1 premium) was payable on application, ₹ 4 per share (including ₹ 1 premium) on allotment, ₹ 2 per share on first call and ₹ 3 per share on final call. All the money was received. Give necessary Journal entries and show share capital in the Balance Sheet.

Quesiton 18:
Authorised capital of Suhani Ltd. is ₹ 45,00,000 divided into 30,000 shares of ₹ 150 each. Out of these company issued 15,000 sahres of ₹ 150 each at a premium of ₹ 10 per share. The amount was payable as follows:
₹ 50 per share on application, ₹ 40 per share on allotment (including premium), ₹ 30 per share on first call and balance on final call. Public applied for 14,000 shares. All the money was duly received.
Prepare an extract of Balance Sheet of Suhani Ltd. as per Schedule III, Part I of the Companies Act, 2013 disclosing the Share Capital.

Solutions Issue of Shares TS Grewal Class 12 [2025-26]

Oversubscription

Questions Nos. 19 to 27

Question 19:
Bright Ltd. issued 80,000 Equity Shares of ₹ 10 each against which it received applications for 1,20,000 shares. Application Money was ₹ 4, Allotment Money and First and Final Call was ₹ 3 each.
Pass the Journal entry for allotment of shares in each of the following cases:
Case 1: Excess Applications were rejected.
Case 2: Pro rata allotment is made.
Case 3: Applicatoins for 20,000 Shares were refused allotment and pro rata allotment was made to remaining.
Case 4: Applications for 10,000 Shares were refused allotment, applications for 10,000 shares were allotted the shares applied and pro rata allotment was made to the remaining.

Question 20:
Faber Ltd. Invited applications for 70,000 equity shares of ₹ 100 each. The application money received @ ₹ 30 per share was ₹ 27,00,000. Name the kind of subscription. List the three alternatives for allotting these shares.

Question 21:
Sangam Marbles Ltd. invited applications for 20,000 Equity Shares of ₹ 100 each issued at par payable on application. The issue was oversubscribed by 5,000 shares and allotment was made on pro rata basis. Pass necessary Journal entries.

Question 22:
Citizen Watches Ltd. invited applications for 50,000 shares of ₹ 10 each payable ₹ 3 on application, ₹ 4 on allotment and balance on first and final call. Applications were received for 60,000 shares. Application were accepted for 50,000 shares, and the remaining applications were rejected. All call were made and received except First and Final call on 500 shares.
Pass the Journal entries in the book sof Citizen Watches Ltd.

Question 23:
Tiny Toys Ltd. issued ₹ 10,00,000 shares of ₹ 100 each at a premium of ₹ 20 for subscription payable as:
₹ 10 per share on application,
₹ 40 per share and ₹ 10 premium on allotment, and
₹ 50 per share and ₹ 10 premium on final payment.
Issue was oversubscribed receiving applications for 13,000 shares. Applicants for 11,000 shares were allotted 10,000 shares and applicants for 2,000 shares were sent letters of regret. All the money due on allotment and final call was duly received. Pass necessary entries in the company’s books to record the above transactions. Also, prepare company’s Balance Sheet on completion of the above transactions.

Quesiton 24:
Sony Media Ltd. issued 50,000 shares of ₹ 10 each payable ₹ 3 on application, ₹ 4 on allotment and balance on first and final call. Applications were received for 1,00,000 shares and allotment was made as follows:
(i) Applicants for 60,000 shares were allotted 30,000 shares.
(ii) Applicants for 40,000 shares were allotted 20,000 shares.
Anupam to whom 1,000 shares were allotted from category (i), failed to pay the allotment money.
Pass Journal entries up to allotment.

Question 25:
Sugandha Ltd. issued 60,000 shares of ₹ 10 each at a premium of ₹ 2 per share payable as ₹ 3 on application, ₹ 5 (including premium) on allotment and the balance on first and final call. Applications money received was ₹ 2,76,000. It was resolved to allot as follows:

Applicants of 40,000 shares	30,000 shares,
Applicants of 50,000 shares	30,000 shares,
Applicants of 2,000 shares	Nil

Mohan, who had applied for 800 shares in Category (i) and Sohan, who was allotted 600 shares in Category (ii) failed to pay the allotment money. Calculate amount received on allotment.

Question 26:

Question 27:

Solutions Issue of Shares TS Grewal Class 12 [2025-26]

Undersubsription

Question Nos. 28 to 33

Question 28:

Question 29:

Question 30:

Question 31:
Pure Products Ltd. is registered with authorised capital of ₹ 10,00,000 divided into 1,00,000 equity shares of ₹ 10 each. It issued 70,000 Equity Shares for subscription of ₹ 2 per share, payable ₹ 3 on application, ₹ 5 on allotment and balance on first and final call. It received application money amounting to ₹ 1,89,000.
You are required to:
(i) Determine whether the company should allot shares; and
(ii) If yes, pass the necessary Journal entries assuming that the company has received due amount on allotment and call.
Solution

Number of Share= \(\frac{1,89,000}{3}\) = 63,000 shares

Journal

Bank A/c Dr. \(\quad\) (63,000 \(\times\)3) 1,89,000
\(\quad\) To Equity Share Application A/c 1,89,000

Equity Share Application A/c Dr 1,89,000
\(\quad\) To Equity Share Capital A/c \(\quad\)1,89,000

Equity Share Allotment A/c Dr. (63,000 \(\times\)5) 3,15,000
\(\quad\) To Equity Share Capital A/c (63,000 \(\times\)3) 1,89,000
\(\quad\) To Securities Premium A/c (63,000 \(\times\)2) 1,26,000

Bank A/c Dr. 3,15,000
\(\quad\) To Equity Share Allotment A/c 3,15,000

Equity Share Allotment A/c Dr. (63,000 \(\times\)5) 3,15,000
\(\quad\) To Equity Share Capital A/c (63,000 \(\times\)3) 1,89,000
\(\quad\) To Securities Premium A/c (63,000 \(\times\)2) 1,26,000

Question 32:

Question 33:

Solutions Issue of Shares TS Grewal Class 12 [2025-26]

Calls-in-Arrears and Calls-in-Advance

Question No. 34 to 36

Question 34

Question 35:

Question 36:

Solutions Issue of Shares TS Grewal Class 12 [2025-26]

Issue of Shares for Consideration other than Cash

Question Nos. 37 to 49

Question 37:
Random Ltd. took over running business of Mature Ltd. comprising of Assets of ₹ 45,00,000 and Liabilities of ₹ 6,40,000 for a purchase consideration of ₹ 36,00,000. The amount was settled by bank draft of ₹ 1,50,000 and balance by issuing 12% Preference Shares of ₹ 100 each at 15% premium. Pass entries in the books of Random Ltd.
Solution
Assets A/c Dr. 45,00,000
\(\quad\) To Liabilities A/c 6,40,000
\(\quad\) To Mature Ltd. A/c36,00,000
\(\quad\) To Capital Reserve A/c 2,60,000

Mature A/c Dr 36,,00,000
\(\quad\) To Bank A/c 1,50,000
\(\quad\) To 12 % Preference Share Capital A/c 30,000 ×100) 30,00,000
\(\quad\) To Securties Premium A/c (30,000 × 15) 4,50,000

No. of shares to be issued = \(\frac{3,60,000 – 1,50,000}{115} = 30,000 shares\)

Question 38:
2,000 Equity Shares of ₹ 10 each were issued to Moon Limited from whom assets of ₹ 25,000 were acquired Pass Journal entry.
Solution
Assets A/c Dr. 25,000
\(\quad\) To Moon Ltd A/c 20,000
\(\quad\) To Capital Reserve A/c 5,000

Moon Ltd A/c Dr 20,000
\(\quad\) To Equity Share Capital A/c 20,000

Question 39:
‘Amrit Dhara Ltd.’ issued 800 Equity Shares of ₹ 100 each at a premium of 25% as Fully Paid-up in consideration of the purchase of plant and machinery of ₹ 1,00,000.
Pass entries in company’s Journal.
Solution

Date	Particulars	LF	Dr.	Cr.
(1)	Plant Machinery Ac/ Dr. \(\quad\) To Vendors’ A/c (Purchase of Plant & Machinery )		1,00,000	1,00,000
(2)	Vendors’ A/c Dr \(\quad\) To Equity Share Capital A/c \(\quad\) To Securities Premium A/c (Issue of Equity share at premium)		1,00,000	80,000 20,000

Question 40:

Question 41:

Question 42:

Question 43:

Question 44:

Question 45:

Question 46:

Question 47:

Question 48:

Question 49:

Solutions Issue of Shares TS Grewal Class 12 [2025-26]

Solutions Issue of Shares TS Grewal Class 12