CONCEPT BASED QUESTIONS ACCOUNTING OF SHARES for Practice

Question1. X ltd issued 20,000 shares of Rs 10 each payable as follow: On application Rs 2 On allotment

Rs 3 On first call Rs 4 On final call Rs 1 Public applied for 20,000 shares ( Mr A for 12,000 shares and Mr

B for 8,000 shares). Money dues on various calls were received except Mr A who failed to pay both calls

money. Thereafter his shares were forfeited. These shares were reissued at Rs 7 as fully paid up. Make

entries.

Question 2. COC ltd issued 25,000 shares of Rs 10 each payable as follow: On application Rs 2 On

allotment Rs 4 On first call Rs 3 On final call Rs 1 Public applied for 30 ,000 shares (Mr A for 18,000 and

Mr B for 12,000 shares) and allotment was made pro-rata to both applicants. Money dues on various

calls were received except Mr A who failed to pay both calls money. His shares were forfeited and

reissued at Rs 9 as fully paid up. Make entries.

Question 3. Tata ltd. issued 40,000 shares of Rs 10 each payable as follow: On application Rs 2 On

allotment Rs 3 On first call Rs 2 On final call Rs 3 Public applied for 50,000 shares and allotment was

made to all applicants on pro-rata basis. Money dues on various calls were received except Mr Ramesh

to whom 2000 shares were allotted failed to pay allotment and first call money. Subsequently his shares

were forfeited. Thereafter final call was made and Mr Rajan to whom 1000 shares were allotted failed to

pay final call money. His shares were also forfeited. All these forfeited shares were reissued at Rs 8 as

fully paid up. Make journal entries.

Question 4. Hudco ltd. issued 25,000 shares of Rs 10 each at a premium of Rs 2 per share payable as

follows: On application Rs 2 On allotment Rs 5(including premium) On first call Rs 4 On final call Rs 1

Public applied for 32,000 shares and allotment was made to applicants for 30,000shares on pro rata

basis. Remaining applications were rejected. Money dues on various calls were received except Mr

karan to whom 2400 shares were allotted failed to pay allotment and first call money. Subsequently his

shares were forfeited. Thereafter final call was made and Mr B to whom 1200 shares were allotted failed

to pay final calls money. His shares were also forfeited. These shares were re-issued at Rs 8 as fully paid

up. Make entries.

Question 5. Maruti ltd issued 40,000 shares of Rs 10 each at a premium of 20% payable as follow:

Application Rs 3(including premium Re 1) Allotment Rs 4( including premium Re 1) First

call Rs 3 Final call Rs 2 Public applied for 50,000 shares and allotment was made on pro-rata

basis to all applicants. Mr Raju to whom 4,000 shares were allotted failed to pay allotment and first call

money. Subsequently his shares were forfeited. Mr Kaju to

whom 6,000 shares were allotted failed to pay both calls money. His shares were also forfeited after the

final call. Out of forfeited shares 7,000 shares were re-issued at Rs 8 as fully paid. It includes all the

shares of Mr Kaju. Make entries.