Q.A limited company issued 5000 equity shares of ₹10 per share at premium ₹2 per share. The amount will be due on these as follows-
on application ₹2 per share
on allotment ₹5 per share (including premium ₹2)
on first call ₹2 per share
on second and final call ₹3 per share. Company received applications for 6500 shares. Application for 500 shares were rejected. Pro-rata allotment were made for remaining applicants. A share-holder of 500 shares has not paid the final call. So his shares were forfeited. Forfeited shares were reissued @ ₹7 per share. Give journal entries.

Showing the 12 most recent of 31 on this concept.

1. CBSE 2026Set ANNUAL1 mark
   Q.If applicants for 15000 equity shares were alloted 13500 shares on pro-rata basis, the types of subscription will be __________.

   ›Reveal solutionSolution

   Allotting fewer shares (13,500) than applied for (15,000) on a pro-rata basis indicates over-subscription.

   Pro-rata allotment is used only when a company receives applications for MORE shares than it offers. Here applicants for 15,000 shares were given 13,500 shares proportionately, so the issue attracted more applications th …

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2. CBSE 2026Set ANNUAL1 markMCQ
   Q.Share Application A/c is

   (a) Personal A/c

   (b) Real A/c

   (c) Nominal A/c

   (d) None of these

   ›Reveal solutionSolution

   The Share Application A/c is a Personal Account - option (a).

   The Share Application Account records the money received from and due to the applicants for shares; since it represents a group of persons (the applicants/shareholders), it is classified as a personal account under the traditional classific …

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3. CBSE 2026Set ANNUAL1 mark
   Q.A company sent letter of regret for 200 shares and allotment letters for 25,000 shares to its applicants. Application money was ₹ 20 per share. Calculate the amount of Application money which company is refunding?

   ›Reveal solutionSolution

   Amount of Application money refunded = ₹ 4,000.

   The company sent a letter of regret (full rejection) for 200 shares and allotment letters for 25,000 shares. This means the company received applications for a total of 200 + 25,000 = 25,200 shares, but only 25,000 of these applications are being allotted shares; the remaining 200 shares' worth of applications are being entirely rejected.

   Since application money was ₹20 per share, the refund due on the fully-rejected applications is:

   Refund = 200 shares × ₹20 = ₹4,000

   …

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4. CBSE 2025Set 67/6/11 markMCQ
   Q.(a) A portion of the uncalled capital reserved by a company to be called only in the event of winding up of the company, is called : (A) Subscribed but not fully paid up capital (B) Unissued capital (C) Reserve capital (D) Subscribed capital

   (OR)

   (b) When applications for more shares of a company are received than the number of shares offered to the public for subscription, it is known as : (A) Over subscription (B) Full subscription (C) Subscription at premium (D) Under subscription

   ›Reveal solutionSolution

   Part (a): (C) Reserve Capital — uncalled capital callable only on winding up. Part (b): (A) Over subscription — applications exceed shares offered.

   Part (a)

   A company's authorised capital splits into issued and unissued portions; issued capital may be partly called, leaving an uncalled portion. Under Section 65 of the Companies Act, 2013, a company may, by special resolution, resolve that a part of this uncalled capital shall not be called except in the event of winding up. This ring-fenced portion is Reserve Capital — a permanent security for creditors.

   Option	Meaning
   (A) Subscribed but not fully paid-up	Issued capital with some amount still callable at any time
   (B) Unissued capital	Authorised capital never offered to the public
   (C) Reserve capital	Uncalled capital reserved to be called only on winding up
   (D) Subscribed capital	Face value of shares actually subscribed

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5. CBSE 2025Set ANNUAL1 markMCQ
   Q.A company issued 10,000 shares of Rs. 10 each at a premium of 10%. The amount of premium will be (A) Rs. 10,000 (B) Rs. 20,000 (C) Rs. 8,000 (D) Rs. 5,000

   ›Reveal solutionSolution

   A 10 percent premium on 10,000 shares of Rs 10 each gives a total premium of Rs 10,000, so the answer is (A).

   This is a straightforward BSEB Inter / Bihar Class-12 Accountancy premium calculation.

   Particulars	Working	Amount
   Face value per share	given	Rs 10
   Premium rate	given	10%
   Premium per share	10 x 10%	Re 1
   Number of shares	given	10,000

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6. CBSE 2025Set ANNUAL1 markMCQ
   Q.Which account is to be debited on receive of calls in advance? (A) Calls in Arrear A/c (B) Bank A/c (C) Shareholder A/c (D) Calls in Advance A/c

   ›Reveal solutionSolution

   On receiving calls in advance, Bank A/c is debited (and Calls-in-Advance A/c is credited).

   When a company receives call money before it is actually due, it records the receipt as Bank A/c Dr. To Calls-in-Advance A/c. The bank balance (an asset) increases, so Bank A/c is debited; Calls-in-Advance is a liability of the company until the call falls due, so it is credited. (Calls-in-Arrears, by contrast, is debited when a call is not received.) Hence on receipt of cal …

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7. CBSE 2025Set ANNUAL1 mark
   Q.On 1st April, 2024 P Ltd. received in advance the final call of Rs. 3 per share on 10,000 equity shares. The final call was due on 15-5-2024. Journalise the above transaction.

   ›Reveal solutionSolution

   Money received on 1st April for a call that becomes due only on 15th May is recorded as Calls-in-Advance, a liability, and is adjusted against the Final Call A/c only when the call actually falls due.

   The final call of Rs. 3 per share on 10,000 equity shares = 10,000 × Rs. 3 = Rs. 30,000. Since this amount is received on 1st April, 2024 — before the call is actually made/due (15-5-2024) — it cannot be credited to the Share Final Call Account; it must be recorded as Calls-in-Advance, which is a liability of the company (an amount owed back to the shareholders in the form of shares until the call becomes due).

   Journal Entries:

   Date	Particulars	Dr. (Rs.)	Cr. (Rs.)
   1-4-2024	Bank A/c Dr.	30,000
   	To Calls-in-Advance A/c		30,000
   	(Being final call of Rs. 3 per share on 10,000 shares received in advance)
   15-5-2024	Equity Share Final Call A/c Dr.	30,000
   	To Equity Share Capital A/c		30,000

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8. CBSE 2025Set ANNUAL1 markMCQ
   Q.Arihant Ltd. invited applications for 20,000 Preference Shares @ Rs. 250 each. Applications were received for 25,000 Preference Shares. This situation is known as .........................

   (a) Oversubscription

   (b) Undersubscription

   (c) Full subscription

   (d) Partial subscription

   ›Reveal solutionSolution

   When the number of shares applied for is MORE than the number of shares offered by the company, the issue is said to be oversubscribed.

   Explanation

   Arihant Ltd. offered (invited applications for) 20,000 Preference Shares, but received applications for 25,000 shares — 5,000 shares more than were on offer.

   Term	Meaning
   Oversubscription	Applications received > Shares offered
   Undersubscription	Applications received < Shares offered
   Full subscription	Applications received = Shares offered
   …

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9. CBSE 2024Set ANNUAL1 markMCQ
   Q.Application money cannot be less than ............................. of the nominal value of shares.

   (a) 5%.

   (b) 10%.

   (c) 15%.

   (d) 20%.

   ›Reveal solutionSolution

   Application money cannot be less than 5% of the nominal value of shares — option (a).

   Under Section 39 of the Companies Act, 2013, the amount payable on application for every share shall not be less than 5% of the nominal (face) value of the share (or such other percentage as SEBI may specify for listed issues). This ensures a minimum commitment from applicants.

   …

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10. CBSE 2024Set ANNUAL1 markMCQ
    Q.X Ltd. issued 10,000 ordinary shares of ₹ 10 each at a premium of 20%. All moneys were received on shares. The amount of Share Capital is

    (a) ₹ 1,00,000.

    (b) ₹ 1,20,000.

    (c) Both

    (a) and (b).

    (d) ₹ 80,000.

    ›Reveal solutionSolution

    The amount of Share Capital is ₹1,00,000 — option (a).

    Shares of ₹10 each issued at a 20% premium means an issue price of ₹12 (₹10 face + ₹2 premium). But Share Capital is always recorded at face value only:

    Item	Working	Amount (₹)
    Share Capital	10,000 × 10	1,00,000
    Securities Premium (shown separately)	10,000 × 2	20,000

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11. CBSE 2024Set ANNUAL1 markMCQ
    Q.Pro-rata allotment applies in the case of:- A) Over-subscription B) Minimum-subscription C) Under-subscription D) Equal-subscription

    ›Reveal solutionSolution

    Pro-rata allotment is made to deal with over-subscription, allotting shares proportionately to applicants. Correct option: (A).

    When the number of shares applied for exceeds the number offered (over-subscription), the company cannot allot to everyone in full. One method is pro-rata allotment, where every applicant is allotted shares in proportion to the number applied for, and excess …

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12. CBSE 2024Set ANNUAL1 mark
    Q.Preeti limited had invited application for ₹10,000 equity share of ₹10 each at a premium of ₹1 each. Total application money received at ₹4 per share of ₹45,600. State the numbers of application that are received.

    ›Reveal solutionSolution

    Applications received = Total application money ÷ application money per share = 45,600 ÷ 4 = 11,400 shares.

    The company invited applications for 10,000 shares; the application money was ₹4 per share and the total received was ₹45,600.

    Step	Working	Amount
    Total application money	—	₹45,600
    Application money per share	—	₹4

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