Case Based MCQs of Accounting for Share Capital with Answers

Case/source Based MCQs of Accounting for Share Capital with Answers class 12 for CBSE, ISC, CUET and State Boards

Let’s Practice,

Kaveri Ltd. was registered with an authorised capital of 40,000 equity shares of ₹ 100 each. It offered 30,000 equity shares to the public at a premium of ₹ 40 per share. The amount per share was payable as ₹ 30 on application; ₹ 70 (including premium) on allotment; and the balance on first and final call. 28,000 shares were subscribed by the public. All calls were made. A shareholder holding 1,000 shares failed to pay the allotment and first and final call money.

(a) Issued Capital will be:

(i) ₹ 27,30,000
(ii) ₹ 30,00,000
(iii) ₹ 42,00,000
(iv) ₹ 28,00,000

Ans – (ii)

(b) Subscribed Capital will be:

(i) ₹ 27,00,000
(ii) ₹ 28,30,000
(iii) ₹ 28,00,000
(iv) ₹ 27,30,000

Ans – (iv)

(i) ₹ 28,00,000
(ii) ₹ 28,30,000
(iii) ₹ 27,00,000
(iv) ₹ 27,30,000

Ans – (iii)

(d) Subscribed but not Fully Paid Capital will be:

(i) ₹ 70,000
(ii) ₹ 30,000
(iii) ₹ 27,30,000
(iv) ₹ 1,00,000

Ans – (ii)

(e) Balance of Securities Premium Reserve shown in Balance Sheet will be:

(i) ₹ 12,00,000
(ii) ₹ 10,80,000
(iii) ₹ 11,60,000
(iv) ₹ 11,20,000

Ans – (ii)

India Ltd. invited applications for issuing 3,00,000 equity shares of ₹ 10 each at a premium of ₹ 30 per share. The amount was payable as follows:

On Application	₹ 7 per share (including ₹ 5 premium)
On Allotment	₹ 10 per share (including ₹ 7 premium)
On First Call	₹ 11 per share (including ₹ 8 premium)
On Second and Final Call	Balance Amount

A shareholder holding 2,000 shares did not pay the first call and second and final call money and his shares were forfeited after the final call.

(a) Share forfeiture Account will be Credited by:

(i) ₹ 34,000
(ii) ₹ 10,000
(iii) ₹ 24,000
(iv) ₹ 14,000

Ans – (ii)

(b) Securities Premium Reserve Account will be debited by:

(i) ₹ 36,000
(ii) ₹ 60,000
(iii) ₹ 24,000
(iv) ₹ 20,000

Ans – (i)

(i) ₹ 10,000
(ii) ₹ 24,000
(iii) ₹ 22,000
(iv) ₹ 46,000

Ans – (iv)

(d) Liability of a shareholder is limited to _ of the shares allotted to him.

(i) Face Value
(ii) Called up value
(iii) Paid up Value
(iv) Uncalled up value

Ans – (i)

X Ltd. issued a prospectus inviting applications for 5,00,000 shares of ₹ 10 each at a premium of ₹ 14 per share, payable as follows:

On Application	₹ 8 (including ₹ 5 premium)
On Allotment	₹ 7 (including ₹ 4 premium)
On First Call	₹ 5 (including ₹ 3 premium)
On Second and Final Call	Balance Amount

A shareholder holding 800 shares failed to pay the allotment money and his shares were forfeited after allotment.

(a) In the entry for forfeiture of shares, Share Capital Account will be debited with:

(i) ₹ 2,400
(ii) ₹ 5,600
(iii) ₹ 4,800
(iv) ₹ 8,000

Ans – (iii)

(b) Securities Premium Reserve A/c will be debited by:

(i) ₹ 7,200
(ii) ₹ 4,000
(iii) ₹ 3,200
(iv) ₹ 11,200

Ans – (iii)

(i) ₹ 6,400
(ii) ₹ 4,800
(iii) ₹ 4,000
(iv) ₹ 2,400

Ans – (iv)

(d) Which of the following is not a Capital Profit:

(i) Gain on Forfeiture and reissue of shares.
(ii) Profit earned by a Company after its incorporation
(iii) Securities Premium on issue of shares
(iv) Gain on sale of fixed assets

Ans – (ii)

Johri Ltd. was formed with an authorised capital of ₹ 10,00,000 divided into shares of ₹ 20 each. It offered 40,000 shares to the public for subscription at a premium of ₹ 10 per share. Applications were received for 37,000 shares and allotment was made to all applicants. Amounts were payable as follows:

On Application	₹ 6
On Allotment	₹ 15 (including premium)
On 1st Call	₹ 5
On IInd & Final Call	Balance

It forfeited 3,000 shares of ₹ 20 each (₹ 16 called up) held by Mansi, for non-payment of allotment and the first call. Out of these, 2,000 shares were reissued to Sudha as ₹ 16 called up for ₹ 14 per share. Second and final call was not made by the Company.

(a) Amount transferred to capital reserve will be:

(i) ₹ 14,000
(ii) ₹ 18,000
(iii) NIL
(iv) ₹ 8,000

Ans – (iv)

(b) Balance of Share Forfeiture Account will be:

(i) ₹ 14,000
(ii) ₹ 18,000
(iii) ₹ 6,000
(iv) ₹ 10,000

Ans – (iii)

(i) ₹ 5,76,000
(ii) NIL
(iii) ₹ 5,82,000
(iv) ₹ 7,40,000

Ans – (ii)

(d) Subscribed but not Fully Paid Capital will be:

(i) ₹ 5,76,000
(ii) ₹ 5,82,000
(iii) ₹ 7,20,000
(iv) ₹ 7,26,000

Ans – (i)

(e) Securities Premium can not be utilized for:

(i) Buy-back of its own shares
(ii) Issuing partly paid bonus shares to shareholders
(iii) Issuing fully paid bonus shares to shareholders
(iv) Writing off preliminary expenses of the Company

Ans – (ii)

Z Ltd. invited applications for issuing 3,00,000 equity shares of ₹ 20 each at a premium of ₹ 30 per share. The amount was payable as follows:

On Application	₹ 10 per share (including ₹ 6 premium)
On Allotment	₹ 13 per share (including ₹ 7 premium)
On First Call	₹ 13 per share (including ₹ 8 premium)
On Second and Final Call	Balance Amount

Vishakha, a shareholder holding 500 shares, did not pay the allotment and first call money and her shares were forfeited after first call.

(a) Calls in Arrears Account will be credited by:

(i) ₹ 5,500
(ii) ₹ 20,000
(iii) ₹ 13,000
(iv) ₹ 8,000

Ans – (iii)

(b) Securities Premium Reserve A/c will be debited by:

(i) ₹ 10,500
(ii) ₹ 7,500
(iii) ₹ 12,000
(iv) ₹ 15,000

Ans – (ii)

(i) ₹ 5,000
(ii) ₹ 3,000
(iii) ₹ 8,000
(iv) ₹ 2,000

Ans – (iv)

(d) Share Capital Account will be debited by

(i) ₹ 5,500
(ii) ₹ 10,000
(iii) ₹ 7,500
(iv) ₹ 13,000

Ans – (iii)

Xylo Ltd. was formed on 1st April, 2018, with an authorized capital of ₹ 12,00,000 divided into equity shares of ₹ 10 each.

It invited applications for 30,000 shares to be issued at par, in the year of its formation, all of which were subscribed for and the amount due on them fully received.

On 1st April, 2020, the company issued another 60,000 shares at a premium of ₹ 2 per share to be received with allotment. It received applications for 55,000 shares which were duly allotted.

All amounts due on the allotted shares were received except the final call of ₹ 2 per share on 1,000 shares. The company forfeited these shares and later reissued 800 of the forfeited shares @ ₹ 7 per share fully called up.

The Balance Sheet of the company was prepared as at 31st March, 2021 as per Schedule III of the Companies Act, 2013.

(a) The issued capital of the company to be shown in Notes to Accounts as at 31st March, 2021, under “Share Capital’ will be:

(i) ₹ 12,00,000
(ii) ₹ 9,00,000
(iii) ₹ 8,50,000
(iv) ₹ 8,49,600

Ans – (ii)

(b) The subscribed shares of the company at the end of the year 2020-21 will be:

(i) ₹ 1,20,000
(ii) ₹ 90,000
(iii) ₹ 85,000
(iv) ₹ 84,800

Ans – (iv)

(i) ₹ 12,00,000
(ii) ₹ 8,48,000
(iii) ₹ 8,50,000
(iv) ₹ 8,49,600

Ans – (ii)

(d) The net gain made by the company on reissue of the 800 shares will be transferred to:

(i) Reserve Capital Account
(ii) Capital Reserve Account
(iii) Securities Premium Reserve Account
(iv) Statement of P/L

Ans – (ii)

Happy Days Ltd. was formed with an authorised capital of ₹ 50,00,000 divided into 5,00,000 equity shares of ₹ 10 each. The company issued prospectus inviting applications for 4,00,000 equity shares. The company received applications for 3,70,000 equity shares. During the first year, ₹ 8 per share were called. Suman holding 7,000 shares and Zia holding 5,000 shares did not pay the first call of ₹ 3 per share. Zia’s shares were forfeited after the first call and later on 3,000 of the forfeited shares were re-issued at ₹ 7 per share, ₹ 8 called up.

(a) Calls in Arrears will be:

(i) ₹ 15,000
(ii) ₹ 21,000
(iii) ₹ Nil
(iv) ₹ 36,000

Ans – (ii)

(b) Subscribed and Fully Paid Capital will be:

(i) ₹ 36,80,000
(ii) ₹ 36,69,000
(iii) ₹ 29,13,000
(iv) ₹ Nil

Ans – (iv)

(i) ₹ 29,44,000
(ii) ₹ 29,33,000
(iii) ₹ 29,23,000
(iv) ₹ 36,69,000

Ans – (iii)

(d) In the Balance Sheet of a company, under the heading share capital, at the last is shown:

(i) Authorised Share Capital
(ii) Subscribed Share Capital
(iii) Issued Share Capital
(iv) Reserve Share Capital

Ans – (ii)

(e) For what purpose securities premium account can not be utilized?

(i) Amortization of preliminary expenses
(ii) Issue of Fully Paid Bonus Shares
(iii) Distribution of Dividend
(iv) Buy Back of own shares

Ans – (iii)

Royal Ltd. invited applications for issuing 2,00,000 equity shares of ₹ 10 each at a premium of 25% payable with application. Applications for 4,50,000 shares were received. Applications for 1,00,000 shares were rejected and money refunded. Pro-rata allotment was made to the remaining applicants. The amount per share was payable as follows:

On Application	₹ 4 per share including premium
On Allotment	₹ 3.50 per share

Raghu, who had applied for 7,000 shares failed to pay allotment money. His shares were forfeited immediately after allotment. Afterwards the first and final call was made.

Nandan, who had applied for 10,500 shares, failed to pay the first and final call. His shares were also forfeited. Out of the forfeited shares, 7,000 shares were reissued as fully paid up for ₹ 9 per share including whole of Nandan’s shares.

Based on the above information, you are required to answer the following questions:

(a) Amount received on cash on allotment will be:

(i) ₹ 1,00,000
(ii) ₹ 6,98,000
(iii) ₹ 98,000
(iv) ₹ 86,000

Ans – (iii)

(b) In the entry of forfeiture of Raghu’s shares, amount credited to Share Forfeiture Account will be:

(i) ₹ 28,000
(ii) ₹ 38,000
(iii) ₹ 18,000
(iv) ₹ 12,000

Ans – (iii)

(i) ₹ 26,000
(ii) ₹ 27,500
(iii) ₹ 34,500
(iv) ₹ 41,000

Ans – (ii)

(d) Balance in Reserve and Surplus Account will be:

(i) ₹ 5,00,000
(ii) ₹ 27,500
(iii) ₹ 5,41,000
(iv) ₹ 5,27,500

Ans – (iv)

(e) Subscribed and Fully-paid capital will be:

(i) ₹ 19,70,000
(ii) ₹ 19,83,500
(iii) ₹ 20,00,000
(iv) ₹ 20,13,500

Ans – (i)

X Ltd. invited applications for issuing 2,40,000 equity shares of ₹ 10 each at a premium of ₹ 4 per share. The amount was payable as under:

On Application	₹ 4 per share (including premium ₹ 2)
On Allotment	₹ 4 per share
On First and Final Call	Balance Amount

Applications for 3,00,000 shares were received and pro-rata allotment was made to all the applicants. All calls were made and were duly received except from Rohini, who failed to pay allotment and first and final call on 7,500 shares applied by her. These shares were forfeited. Afterwards, 40% of the forfeited shares were re-issued at ₹ 11 per share as fully paid-up.

On the basis of above information, you are required to answer the following questions:

(a) Call in Arrears amount will be:

(i) ₹ 60,000
(ii) ₹ 48,000
(iii) ₹ 54,000
(iv) ₹ 42,000

Ans – (iii)

(b) Amount transferred to Capital Reserve will be:

(i) ₹ 7,200
(ii) ₹ 18,000
(iii) ₹ 6,000
(iv) ₹ 4,800

Ans – (i)

(i) ₹ 9,60,000
(ii) ₹ 9,48,000
(iii) ₹ 9,62,400
(iv) ₹ 9,50,400

Ans – (iv)

(d) Balance in Reserve and Surplus Account will be:

(i) ₹ 9,68,400
(ii) ₹ 9,57,600
(iii) ₹ 9,50,400
(iv) ₹ 9,61,200

Ans – (ii)

(e) Subscribed and Fully Paid Capital will be:

(i) ₹ 23,64,000
(ii) ₹ 23,40,000
(iii) ₹ 23,74,800
(iv) ₹ 23,50,800

Ans – (i)

EF Ltd. invited applications for issuing 80,000 equity shares of ₹ 50 each at a premium of 20%. The amount was payable as follows:

On Application	₹ 20 per share (including premium ₹ 5)
On Allotment	₹ 15 per share (including premium ₹ 5)
On First Call	₹ 15 per share
On Second and Final Call	Balance amount

Applications for 1,20,000 shares were received. Applications for 20,000 shares were rejected and pro-rata allotment was made to the remaining applicants.

Seema, holding 4,000 shares failed to pay the allotment money. Afterwards, the first call was made. Seema paid allotment money along with the first call. Sahaj who had applied for 2,500 shares failed to pay the first call money. Sahaj’s shares were forfeited and subsequently 40% shares were reissued to Geeta for ₹ 38 per share, ₹ 40 per share paid up. Final call was not made.

Based on above information, you are required to answer the following questions:

(a) Amount received on allotment in Cash will be:

(i) ₹ 11,60,000
(ii) ₹ 8,00,000
(iii) ₹ 7,40,000
(iv) ₹ 7,60,000

Ans – (iv)

(b) In the entry for forfeiture of Sahaj’s shares, amount Credited to Share Forfeiture A/c will be:

(i) ₹ 37,500
(ii) ₹ 50,000
(iii) ₹ 30,000
(iv) ₹ 60,000

Ans – (ii)

(i) ₹ 18,400
(ii) ₹ 20,000
(iii) ₹ 10,400
(iv) ₹ 48,400

Ans – (i)

(d)

(i) Subscribed and fully paid capital will be – ₹ 31,52,000
(ii) Subscribed and fully paid capital will be – ₹ 31,82,000
(iii) Subscribed but not fully paid capital will be – ₹ 31,82,000
(iv) Subscribed but not fully paid capital will be – ₹ 31,52,000

Ans – (iv)

V.D Ltd. invited applications for issuing 2,00,000 equity shares of ₹ 10 each at a premium of ₹ 6 per share. The amount per share was payable as follows:

On applications	₹ 3 (including premium ₹ 1)
On Allotment	₹ 7 (including premium ₹ 5)
On first and final call	Balance amount

Applications were received for 2,50,000 shares. Application money on 10,000 shares was returned. Shares were allotted to the remaining applicants on pro-rata basis.

The company received all the money due on allotment except from Agam, who was allotted 1,000 shares. Her shares were forfeited immediately after allotment. Afterwards, the first and final call was made. Seema, the holder of 2,000 shares, did not pay the first and final call on her shares. Her shares were also forfeited. 50% of the forfeited shares, each of Agam and Seema, were reissued as fully paid-up @ ₹ 16 per share.

You are required to answer the following questions:

(a) Amount received in Cash on allotment will be:

(i) ₹ 12,80,000
(ii) ₹ 13,93,600
(iii) ₹ 12,73,000
(iv) ₹ 12,73,600

Ans – (iv)

(b) In the entry on forfeiture of Agam’s shares, amount credited to Share Forfeiture Account will be:

(i) ₹ 2,600
(ii) ₹ 6,400
(iii) ₹ 2,000
(iv) ₹ 8,600

Ans – (i)

(i) ₹ 10,600
(ii) ₹ 5,300
(iii) ₹ 8,300
(iv) ₹ 7,200

Ans – (ii)

(d) Balance in Reserve and Surplus Account will be:

(i0 ₹ 12,09,000
(ii) ₹ 5,300
(iii) ₹ 12,14,300
(iv) ₹ 12,05,300

Ans – (iii)

(e) In the Balance sheet, Share Forfeiture A/c will be shown under the sub-head:

(i) Reserve and Surplus
(ii) Surplus
(iii) Share Capital
(iv) Other Reserves

Ans – (iii)

Case Based MCQs of Accounting for Share Capital with Answers

Anurag Pathak

Leave a ReplyCancel Reply

Anurag Pathak

Related Posts

Case Based MCQs of Government Budget and the Economy class 12

Case Based MCQs of Money and Banking chapter class 12

Assertion Reason MCQs of Admission of Partner Class 12

Leave a ReplyCancel Reply

Trending now