Worksheets Chapter 1 Accounting for Share Capital Class 12 Accountancy

Students should refer to Worksheets Class 12 Accountancy Accounting for Share Capital Chapter 1 provided below with important questions and answers. These important questions with solutions for Chapter 1 Accounting for Share Capital have been prepared by expert teachers for Class 12 Accountancy based on the expected pattern of questions in the class 12 exams. We have provided Worksheets for Class 12 Accountancy for all chapters on our website. You should carefully learn all the important examinations questions provided below as they will help you to get better marks in your class tests and exams.

Accounting for Share Capital Worksheets Class 12 Accountancy

Question. Issued 10,000 shares of ₹ 100 each to the Narayan Ltd @ 10% premium and paid ₹ 2,00,000 in cash for a consideration of running business purchased. Journalise this transaction.

A

Question. Identify the correct sequence of share capital to be shown in notes to accounts as per schedule III of Companies Act, 2013.
(i) Issued capital
(ii) Authorised capital
(iii) Subscribed capital
(a) (i), (ii), (iii)
(b) (ii), (iii), (i)
(c) (iii), (ii), (i)
(d) (ii), (i), (iii)

D

Question. Total capital specified in capital clause is ₹ 50,00,000 which is divided in 35,000 equity shares of ₹ 100 each and 15,000, 10% preference shares of ₹ 100 each. The company issued 10,000 equity shares and 5,000 preference shares. The public subscribed for 9,000 equity shares and 4,500 preference shares out of the issued shares. What will be the subscribed capital amount?
(a) ₹ 50,00,000
(b) ₹ 50,000
(c) ₹ 9,00,000
(d) ₹ 13,50,000

D

Question. Which of the following statement(s) is/are correct?
(i) Capital to be called-up only on liquidation of the company is called reserve capital.
(ii) Shares cannot be issued at discount.
(iii) The liability of every shareholder of the company is unlimited.
(iv) When application received from public is more than the number of shares offered, than it is a situation of under subscription.
(a) (i) and (ii)
(b) (ii) and (iii)
(c) (i), (iii) and (iv)
(d) Only (ii)

A

Question. Neton Ltd has in its memorandum of association, capital clause stating that it is formed with 75,000 equity shares of ₹ 100 each. The company has issued the entire shares and the public has also subscribed and paid up for the full amount on application itself. What will be the subscribed capital?
(a) ₹ 75,00,000
(b) ₹ 10,00,000
(c) ₹ 1,00,000
(d) ₹ 7,50,000

A

Question. A Ltd forfeited 300 shares of ₹ 10 each, fully called-up, held by B for non-payment of allotment money of ₹ 3 per equity share and final call money of ₹ 4 per share. Out of these, 250 shares were re-issued to C for a total payment of ₹ 1,800. Calculate the amount to be transferred to capital reserve account?
(a) ₹ 750
(b) ₹ 50
(c) ₹ 700
(d) ₹ 900

B

Question. Assertion (A) Preliminary expenses are not shown in balance sheet.
Reason (R) Preliminary expenses are written-off in the same year.
Alternatives
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true

A

CASE STUDY BASED QUESTIONS

Raghuram Limited company has an Authorized capital of 1, 00,000 shares of Rs.10 each as per the Capital clause of the Memorandum of Association of the company.
The company issued 5,000 shares to the promoters of the company in consideration for their services.
The company further issued 10,000 shares to the vendors for the purchase of Machinery costing Rs.1, 20,000. The remaining shares are issued at Rs.10 each at a premium of Rs.2 and shares are fully subscribed

A shareholder holding 500 shares failed to pay the first and final call. His shares were forfeited and later on re issued at Rs.8 per share fully paid up.

Question: The company issued Rs.1,00,000 worth of shares towards the purchase price of machinery costing Rs.90,000. The excess of Rs.20000 is transferred to
(A) Share capital a/c
(B) Capital reserve a/c
(D) Cash a/c

C

Question: Which one of the following is the registered capital of the company?
(a) Paid up capital
(B) Uncalled capital
(C) Authorized capital
(D) Issued capital

C

Question: If Shares are issued to promoters for their services then the account debited will be
(a) Goodwill a/c
(B) Promoters a/c
(C) Asset a/c
(D) Expenses a/c

A

Question: What entry you will pass if asset is purchased and shares are issued at premium.
(a) Vendor a/c Dr To share capital
(B) Assets a/c Dr To share capital To share premium
(C) Vendor a/c Dr share premium a/c Dr To Share capital
(D) Vendor a/c Dr To share capital To share premium

D

A company issued 25,000 equity shares of Rs.10 each at a premium of Rs.3 per share payable as follows:
On Application Rs.2 On Allotment Rs.5(including premium) On First call Rs.1 Balance on final call
The company received Rs. 1,00,000 towards application money. Of which 10000 applications are rejected and the remaining applications are adjusted towards allotment. A shareholder holding 3000 shares paid the first call and final call along with allotment money.

Question: How much application money is adjusted towards allotment?
(a) 30,000
(B) 40,000
(C) 15,000
(D) 10,000

A

Question: How many applications are received by the company?
(a) 25,000
(B) 50,000
(C) 75,000
(D) 1,00,000

B

Question: What journal entry you will pass for excess application rejected?
(a) Share application a/c Dr to Bank
(B) Share application a/c Dr to Share allotment
(C) Share application a/c Dr to Share capital
(D) Share application a/cDr to Share first call

A

Question: After allotment how much net allotment money is received by the company?
(a) 1,13,000.
(B) 1,25,000
(C) 1,40,000
(D) 95,000

A

Mr. Ramesh worked as a Lower division clerk in a state government office in the state of Telangan(a) He is very much interested in investing his savings in shares of limited companies. He applied for 300 shares from Reliance Industries lt(D) He was allotted all shares. Due to some financial constraints he failed to pay the allotment money of Rs.5( including premium of Rs.2) and first and final call of Rs.3. The company after giving due notices, forfeited all the shares of Rs10 each issued at a premium of Rs.2. 1/3rd of the forfeited shares were reissued at 11 per share fully paid up to Mr. Ram

Question: What entry will you pass to transfer forfeiture a/c to Capital reserve?
(a) Share forfeiture a/cDr 400 To Capital reserve a/c 400
(B) Share forfeiture a/f Dr 450 To Capital reserve a/c450
(C) Share forfeiture a/c Dr 600 To Capital reserve a/c 600
(D) Share forfeiture a/c Dr 360 To Capital reserve a/c 360

A

Question: The total amount debited to share capital account while forfeiting the shares is
(a) Rs.2,500
(B) Rs.3,000
(C) Rs.4,000
(D) Rs.5,000

B

Question: How much amount is shown in the Balance sheet under share forfeiture account?
(a) Rs.800
(B) Rs.880
(C) Rs.400
(D) Rs.650

A

Question: How much amount is received on reissue of forfeited shares?
(a) Rs.3,000
(B) Rs.3,300
(C) Rs.3,600
(D) Rs.1,100

D

Question. Inventory turnover ratio for the year 2020 will be …… .
(a) 1.62 times
(b) 1.82 times
(c) 1.55 times
(d) 1.92 times

D

Question. Cost of revenue from operations for the year 2020 would be …………… .
(a) ₹ 21,12,000
(b) ₹ 21,13,000
(c) ₹ 21,15,000
(d) ₹ 21,17,000

A

Question. Current ratio for the year 2020 will be …………… .
(a) 2 : 1
(b) 1.8 : 1
(c) 2.32 : 1
(d) 2.4 : 1

C

Question. Quick ratio for the year 2018 will be …………… .
(a) 1.75 : 1
(b) 1.8  : 1
(c) 0.94 : 1
(d) 1.25 : 1

A

A MBA graduate from IIT Kharagpur instead of going to America and Canada decided to become an entrepreneur in India and decided to start a Public Limited Company in the city of Kolkot(a) After preparing the Memorandum of Association for the company he got the permission from the Comptroller of Capital Issues to issue 1,00,000 Equity shares of Rs.10 each at a premium of Rs.2. The pubic subscribed for 95000 applications. The company decided to allot the shares on 1-4-2021. The company made all the calls and all the money is received except on 2000 shares which are forfeited and later on reissued at Rs.9 per share fully paid up.

Question: As per SEBI guidelines, Application money should not be less than ……. Of the issue price of each share
(a) 10% of the issue price
(B) 15% of the issue price
(C) 25% of the issue price
(D) 50% of the issue price

C

Question: Minimum subscription amount of 90% is related to which share capital.
(a) Authorised capital
(B) Issued capital
(C) Paid up capital
(D) Reserve capital

B

Question: If the shares are forfeited how much money should be returned to the defaulting shareholders?
(a) Nothing
(B) All calls paid
(C) Only application money
(D) Application and allotment money.

A

Question: Which clause in the Memorandum of Association states about Authorized capital of the company?
(a) Name clause
(B) Object clause
(C) Capital clause
(D) Association clause

C

Soon after incorporation of Arvind Lt(D) decided to issue 80,000 equity shares of Rs.10 each at a premium of Rs.5 per share. Instead of collecting all the capital in the form of cash/bank they have decided to go for the purchase of assets in return pay them in the form of issue of shares. They approached a businessman who sells machinery which is very must useful in production of that material. The company purchased Machinery worth Rs.5,50,000 and in return they issued equity shares of Rs.10 each at a premium of 10%. Further they issued shares to the public for subscription. The issue is oversubscribed to the extent of 10%. To the surprise one shareholder who got 1000 shares paid all the money due on allotment Rs.3 and call money Rs.2 along with allotment money..

Question: If the shares are issued at premium of 10% against the purchase of an asset, then how many shares are issued?
(a) 45,000 shares
(B) 55,000 shares
(C) 45,000 shares
(D) 50,000 shares

D

Question: Select the type of allotment of shares made to the company against the purchase of Machinery.
(a) Issue against consideration other than cash
(B) Initial public offer
(C) Issue for cash
(D) Preferential allotment

A

Question: How much amount is re ceived as calls in advance?
(a) Rs.5000
(B) Rs.3000
(C) Rs.2000
(D) Rs.1000

A

Question: Which option is not available to adjust the excess applications received on issue of equity shares?
(a) Excess applications can be rejected
(B) Excess applications can be adjusted towards allotment.
(C) Excess applications can be partly rejected and partly adjusted towards allotment.
(D) Excess applications can be allotted with preference shares

D

Ravi Industries Lt(D) A company in the manufacture of computers decided to issue for public subscription 40000 equity shares of Rs.10 each at a premium of Rs.2 payable as :

On Application –Rs.2 per share On Allotment _ Rs. 5 per share(including premium)

On first call _ Rs.2 per share On Second and final call _ Rs.3 per share,
Applications were received for 60000 shares. Allotment was made on pro rata basis to the applicants for 48000 shares, the remaining applications being refuse(D) Money overpaid on applications was utilized towards sum due on allotment. Ram applied for 2400 shares failed to pay the allotment money due and shyam to whom 2000 shares were allotted filed to pay the two calls. These shares were subsequently forfeited after the second and final call was made. All the forfeited shares were reissued as fully paid at Rs.8 per share.

Question: How many applications are rejected and how much money is returned?
Page 71 of 152
(a) 12000, Rs.24000
(B) 8000,Rs.16000
(C) 20000,Rs.40000
(D) 16000,Rs.32000

A

Question: The excess applications and application money adjusted towards allotment is :
(a) 8000, Rs.16000
(B) 12000,Rs.24000
(C) 20000,Rs.40000
(D) 16000,Rs.32000

A

Question: The total forfeiture amount before reissue of forfeited shares is:
(a) Rs.14800
(B) Rs.18400
(C) Rs.16400
(D) Rs.14600

A

Question: How many shares are allotted to Ram?
(a) 2000 shares
(B) 2400 shares
(C) 600 shares
(D) 1800 shares

A

Ambala Lt(D) Was registered with an authorized capital of Rs.2,00,000 in Rs.10 per equity share, of these 6000 equity shares of Rs.10 each issued as fully paid to the vendor for purchase of building, at a premium of Rs.2 per share. 8000 equity shares were issued for subscription and during the first year Rs.5 per equity share were called-up, payable Rs.2 on application, Rs.1 on allotment, Rs,1 on first call and Rs.1 on final call. The amount received in respect of these shares was:

On 6000 Equity shares the full amount was receive(D)

On 1250 shares Rs.4 per Equity share,

On 500 shares Rs.3 per Equity share,

On250 shares Rs.2 per Equity share

The company forfeited 750 equity shares on which less than Rs.4 per share has been pai(D) Question: How many shares are not still issued by the company?
(a) 6000
(B) 5000
(C) 7000
(D) 10000

A

Question: What is the price of the building purchased against issue of equity shares?
(a) Rs.72000
(B) Rs.60000
(C) Rs.75000
(D) Rs.66000

A

Question: On forfeiture how much money is credited to share forfeiture account?
(a) Rs.2000
(B) Rs.250
(C) Rs.500
(D) Rs.750

A

Question: How many shareholders did not pay the first call and final call money only?
(a) 750
(B) 2000
(C) 1250
(D) 500

A

Raman a shareholder who works in a Maruti Udyog Lt(D) Which is a pioneer in manufacturing small cars got an invitation from the company to buy shares issued by the company under the Employees Stock Option Plan. At first he is not interested in buying the shares but after compulsion from his friends he exercised his option to buy shares from the company. Afterwards he came to know this type of issue can be made to the promoters of the company for the services rendered by them to the company. He purchased 200 shares of Rs.10 each at a premium of Rs.25 whereas the current market value of the share is Rs.150.

Question: What type of shares can be issued under ESOP?
(a) It should of the same class of shares already issued
(B) It should be a new issue of shares
(C) It should be of preference shares only
(D) It can of any type of shares.

A

Question: The value of option is :
(a) The issue price of the shares
(B) The market price of the shares
(C) The difference between market price and issue price of the share
(D) The face or par value of the shares

C

Question: The shares issued to the employees of the company are called as
(a) ESOP
(B) IPO
(C) Preferential allotment
(D) Public issue

A

Question: What name is given for the shares issued to the promoters of the company as remuneration for incorporation of the company?
(a) Sweat Equity
(B) Salary shares
(C) Remuneration shares
(D) Normal issue of shares

A

Nitro Paints Lt(D) Invited applications for issuing 1,60,000 equity shares of Rs.10 each at a premium of Rs.3 per share. The amount payable as follows:

On Application Rs.6 per share (including premium Rs.1)

On Allotment Rs.3 per share (including premium Rs.1);
The Balance on First and Final call.
Applications for 1,80,000 shares were receive(D) Applications for 10,000 shares were rejected and pro rata allotment was made to the remaining applications. Over payment received on application was adjusted towards sum due on allotment and calls. All calls were made and duly received except allotment and final call from Aditya who was allotted 3200 shares. His shares were forfeite(D) Half of the forfeited shares were reissued for Rs.43000 as fully paid up.

Question: How many shares were applied by Aditya to get 3200 shares allotted?
(a) 3400
(B) 4300
(C) 2300
(D) 3400

A

Question: How much allotment money is in arrears on Aditya’s default?
(a) Rs.8400
(B) Rs.4800
(C) Rs.6400
(D) Rs.4600

A

Question: What amount of the forfeited shares is transferred to capital reserve?
(a) Rs.8600
(B) Rs.6800
(C) Rs.7800
(D) Rs.8700

A

Question: Mention the total amount of premium to be shown in the Balance sheet?
(a) Rs.500600
(B) Rs.600500
(C) Rs.650500
(D) Rs.560600

A

Max Lt(D), invited applications for2,00,000 Equity shares of Rs.10 each to be issued at 20% premium. The money payable per share was: On Application Rs.5,on allotment Rs.4(including premium of Rs.2) , First call Rs.2 and Final call Rs.1.Applications were received for 2,40,000 shares and allotment was made as:

i. To applicants for 1,00,000 shares in FULL
ii. To applicants for 80,000 shares –60,000 shares,
iii. To applicants for 60,000 shares—40,000 shares.
Applications of 1000 shares falling in category (i) and applicants of 1200 shares falling in category (ii) failed to pay allotment money. These shares were forfeited on failure to pay the first call. Holders of 1200 shares failing in category (iii) failed to pay the first and final call and these shares were forfeited after final call. 1300 shares (1000 of category (i) and 300 of category(ii) were reissued at Rs.8 per share as fully paid up.

Question: Mention the paid up capital of the company after all the calls is made.
(a) Rs.19,94,400
(B) Rs.19,00,000
(C) Rs.20,00,000
(D) Rs.20,94,400

A

Question: How much is the total forfeited money on all categories of shares?
(a) Rs.19,400
(B) Rs.11,000
(C) Rs.8,400
(D) Rs.20,000

A

Question: The journal entry for allotment money received is:
(a) Bank a/c Dr 5,93,900 To Share allotment a/c 5,93,900
(B) Bank a/c Dr6,00,000 To share allotment a/c 6,00,000
(C) Bank a/c Dr5,95,000 To Share allotment a/c 5,95,000
(D) Bank a/c Dr6,05,000 To share allotment a/c 6,05,000