CBSE Class 12 Accountancy Accounting For Share Capital Worksheet

Question. Name the head of Capital Clause of Memorandum of Association of a company in which maximum amount of share capital mentioned is called .
(a) Reserve Capital
(b) Subscribed Capital
(c) Authorised Capital
(d) Issued Capital
Answer. C

Question. A shareholder allotted to whom 9,000 shares of ₹ 10 per share failed to pay first & final of ₹ 2 per share. ₹ 18,000 to be recorded in the books of company with
(a) Dr. to Calls-in Arrears A/c
(b) Dr. to Share Forfeiture
(c) Cr. to Calls-in Arrears A/c
(d) Cr. to Share Forfeiture A/c
Answer. A

Question. Arrange the following in proper sequence as types of “Share Capital”
a) Paid up capital
b) Issued capital
c) Subscribed capital
d) Authorised capital
a) a) ,c) , d) , b)
b) d), c) , b), a)
c) d), b), c),a)
Answer. C

Question. Shobha Limited was formed with share capital of Rs. 50,00,000 divided into 50,000 shares of Rs.100 each. 8,000 shares were issued to the vendor as fully paid for purchase consideration of a Machinery acquired. 30,000 shares were allotted in payment of cash on which Rs.70 per share was called and paid. State the amount of subscribed capital:
A) Rs. 50,00,000
B) Rs. 30,50,000
C) Rs. 29,00,000
D) Rs. 20,00,000
Answer. C

Question. Star Ltd forfeited 1,000 shares of Rs.10 each (which were issued at par )of Jeevan, a share holder of the company, for non payment of allotment money of Rs.4 per share. The called up value per share was Rs.7. On forfeiture, the amount debited to share capital:
a) Rs.3,000
b) Rs.7,000
c) Rs.4,000
d) Rs.10,000
Answer. B

Question. The allowed amount of discount on re-issue of shares will be
(a) 10% of issue price
(b) Up to the amount of forfeited money
(c) Could not issue at discount
(d) None of these
Answer. B

Question. Once, forfeited shares reissued, balance of share forfeiture money will be transferred to:
(a) General Reserve
(b) Capital Reserve
(c) Reserve Capital
(d) Securities Premium Reserve
Answer. B

Question. 12,000 shares of ₹ 100 each forfeited due to non-payment of allotment of ₹ 40 per share and first & final call of ₹ 30 per share. Out of the forfeited shares, 9,000 shares were reissued at ₹ 80 per share fully paid. Which of the following amount of share forfeiture account will be transferred to Capital Reserve Account?
(a) 90,000
(b) 1,80,000
(c) 3,60,000
(d) 2,70,000
Answer. A

CASE STUDY BASED QUESTIONS

Read the following statement carefully and give the answer for the questions:
Shine Firework Ltd is authorised to issue shares 5,00,000 of ₹ 100 each. Company raised the capital by issue of 2,00,000 shares through e-IPO. As per the decision of Managing Board of Directors of company, company issued 75,000 shares to their parent company and 40,000 shares issued to existing employees of company as per their choice and option at the below price than the market price.

Question. “Company issued 75,000 shares to their parent company” is an example of .
(a) Public Issue
(b) Private Placement
(c) ESOP
(d) Issue other than cash
Answer. B 

Question. “40,000 shares issued to existing employees of company as per their choice and option at the below price than the market price.” Is an example of
(a ) Public Issue
(b) Private Placement
(c) ESOP
(d) Issue other than cash
Answer. C

Read the following statement carefully and give the answer for the questions:
X Ltd issued 2,00,000 shares of ₹ 100 each. Amount to be paid on Application ₹ 30 per share; on allotment ₹ 40 per share and on first & final call ₹ 30 per share. All money was duly subscribed and paid towards the nominal value of shares except on 9,000 shares who failed to pay allotment and calls money. These shares were forfeited. 5,000 shares were re-issued at ₹ 80 per share fully paid.

Question. Which amount of the following will be shown into the Balance Sheet of the company under the sub-head “Share Capital”?
(a) ₹ 1,96,00,000
(b) ₹ 1,97,20,000
(c) ₹ 2,00,00,000
(d) ₹ 1,97,70,000
Answer. A

Question. Which of the following amount will be, balance in Share Forfeiture Account?
(a) ₹ 4,00,000
(b) ₹ 1,50,000
(c) ₹ 1,20,000
(d) ₹ 50,000
Answer. D

Question. Given below are two statements, one labelled as Assertion the other labelled as Reason (R):
Assertion(A): Preferential allotment means allotment of shares at a pre determined price to the identified people who are interested in taking shares in the company.
Reason(R): Employee Stock Option Plan is a category of sweat Equity In the context of the above two statements, which of the following is correct?
(A) Both (A) and (R) are correct and (R) is the correct reason of (A)
(B) Both (A) and (R) are correct but (R) is not the correct reason of (A).
(C) Only (R) is correct.
(D) Both (A) and (R) are wrong.
Answer. B

Question. Given below are two statements, one labelled as Assertion the other labelled as Reason (R):
Assertion (A): The forfeited shares may be reissued by the company at par, at premium or at discount.
Reason(R): Reissue of forfeited shares is not an issue of shares but is selling the shares that were issued earlier and were cancelled by the company. In the context of the above two statements, which of the follow-ing is correct?
(A) Both (A) and (R) are correct and (R) is the correct reason of (A).
(B) Both (A) and (R) are correct but (R) is not the correct reason of (A).
(C) Only (R) is correct.
(D) Both (A) and (R) are wrong.
Answer. A

Question. Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R)
Assertion (A)The part of un-called capital, to be called only in the liquidation of a company is called Reserve Capital.
Reason (R) : It can be used for writing off capital losses.
In the context of the above two statements, which of the following is correct?
(A) is correct, but (R) is wrong.
(B) Both (A) and (R) are correct.
(C) (A) is wrong, but (R) is correct.
(D) Both (A) and (R) are wrong
Answer. A

10 Complete the following journal entries for forfeiture and reissue.

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