WORKSHEET

ISSUE OF SHARES
Q1. Hindustan Limited invited applications for 1,00,000 shares of Rs 10 each at a price of Rs
11 payable Rs 4 on application (including premium), Rs 4.50 on allotment and balance on
first and final call. Applications were received for 1,20,000 shares. Allotment was made as: to
applicants of 80,000 shares: 100%; to applicants of 40,000 shares: pro-rata to all applicants.
Excess application money was adjusted against further money payable. Mr. Rahul, to whom
1,000 shares were allotted on a pro-rata basis, failed to pay the allotment and call money. Mr.
Sanjay, to whom 500 shares were allotted failed to pay the call money. All these shares were
forfeited after final call. Out of these shares, 1,250 (all of Rahul) were issued to Rajiv @ Rs 9
each. Pass necessary entries.
Q2. Applications were invited by the directors of Grobigg Ltd for 15,000 of its equity shares
at Rs 115 per share payable as follows: (a) On application on 1st April, 2017 (including
premium of Rs 15 per share) Rs75; (b) On allotment on 30th April, 2017 Rs 20; and (c) On
first & final call on 31st May 2017 Rs 20. Applications were received for 18,000 shares and it
was decided to deal with these as follows: 1. To refuse allotment on applicants for 800
shares. 2. To give full allotment to applicants for 2,200 shares. 3. To allot the remainder of
the available shares pro-rata among the other applicants. 4. To utilize the surplus received on
applications in part payment of amounts due on allotment. An applicant, to whom 400 shares
had been allotted, failed to pay the amount due on the first and final call and his shares were
declared forfeited on 31st July 2017.These shares were re-issued on 3rd September, 2017 as
fully paid at Rs 90 per share. Pass Journal entries including cash items.
Q3. A. Ltd invited applications for 1,00,000 of its Equity Shares of Rs10 each on the
following terms: (i) Payable on application on 31st January, 2017 Rs 5 per share including
premium. (ii) Payable on allotment on 28th February, 2017, Rs 4 per share, (iii) Payable on
first and final call on 31st July, 2017, Rs3 per share. Applications for 1,25,000 shares were
received. It was decided: (a) to refuse allotment to the applicants of 5,000 shares; (b) to allot
in full to applicants for 20,000 shares; (c) to allot the balance of the available shares pro-rata
among the other applicants; and (d) to utilise excess application moneys in part payment of
allotment moneys. One applicant to whom shares had been allotted on Pro-rata basis, did not
pay the amount due on allotment and on call and his 200 shares were forfeited on September
30,2017. The shares werere-issued on November 30,2017 atRs 9.50 per share. Show the
Journal and cash book entries necessary to record the foregoing transactions.
Q4. Analysts Limited had issued 1,00,000 equity shares of Rs10 each to the public at a
premium of Rs 2 per share. The amount was payable as follows: On application Rs 3; on
allotment Rs5 (including premium); on first call Rs 2 and on second call Rs 2. Applications
were received for 1,50,000 equity shares and allotment was made pro-rata to all applicants.
Excess amounts paid on applications were adjusted against allotment moneys due. Mr. X who
was allotted 500 shares did not pay the allotment money and the two calls. Consequently, his
shares were forfeited. Out of the forfeited shares, 300 shares were re-issued to Mr. Y at Rs 10
per share. Pass necessary Journal Entries (including cash transactions) in the books of the
company to record the above transactions and also show the Balance Sheet.
Q5.New Company Ltd issued 50,000 equity shares of ~ 10 each at a premium of Rs 2 per
share payable as: On Application— Rs 3 per share; on Allotment — Rs 5 per share
(Including Premium); on First Call — Rs 2 per share; on Final Call — Rs 2 per share.
Applications were received for 80,000 shares. Allotments were made pro-rata to applicants
for 60,000 shares and other applications were refused. One of the allottees Sri B. Chakrabarty
who was allotted 1,030 shares failed to pay the allotment money. Another Sri Anil Mukherjee
who was allotted 5,000 shares failed to pay the final call. All these 6,030 shares were
forfeited after the final call was made. Three months later, these shares were re-issued at Rs 7
per share. Show the Journal Entries required to record the above noted transactions.
Q6.D & Co. Ltd. made a public issue of 30,000 shares of Rs 10 each payable as follows:
On application Rs 5.00 per share (including premium of Rs 2.00).
On allotment Rs 4.00 per share on call Rs 3.00 per share.
No allotment was made for 2,000 shares applied for and the amount received therein was
refunded along with letter of regret. 30,000 shares were allotted pro-rata amongst the
applicants for 40,000 shares, the excess application money being adjusted with the amount
due on next call. Mr. Patra holding 75 shares failed to pay the allotment money. His shares
were fortified after the subsequent call. The forfeited shares were reissued as fully paid on
payment of Rs 9.00 per share by Mr. Sen. Show the necessary Journal entries.
Q7. XYZ Ltd. invited applications for 10,000 equity shares of ~ 100 each at a premium of
20% payable as on application Rs 50 per share, on allotment (including premium) Rs 50 per
share and the balance on first and final call. Applications were received on 15,000 shares and
application money for 5,000 shares were refunded. Allotment was made in full on all other
applications. All money due was received except the first and final call on 500 shares which
were forfeited. Out of these forfeited shares, 400 shares were reissued at Rs 100 each as fully
paid up. Pass necessary Journal entries in the books of XYZ Ltd.
Q8. HP Ltd. issued 10,000 equity shares of Rs 100 each @ 5% premium payable as Rs 35 per
share on application, Rs 40 per share on allotment (including Rs 5 as premium) and Rs 30 per
share on call. Issue was subscribed fully. Money due on all shares was fully received
excepting Mr. Nako holding 60 shares who failed to pay the allotment money and call money
and Mr. Tabo holding 85 shares who failed to pay the call money. All these 145 shares were
forfeited. Out of these forfeited shares, 125 shares including all of Mr. Nako were reissued at
Rs 80 per share. Show necessary Journal entries in the books of HP Ltd.
Q9. PQR Ltd. invited applications for 1,000 equity shares of Rs 200 each at a premium of
10% payable as: on application Rs 50 per share, on allotment (including premium) Rs 60 per
share, the balance on first and final call. Applications were received for 1,200 shares and
application money for 200 shares was refunded. Allotment was made in full on all other
applications. All money due was received except the first and final call on 100 shares which
was forfeited after necessary legal formalities of the forfeited shares 50 shares were reissued
at Rs 150 as fully paid-up. Pass necessary Journal entries in the books of PQR Ltd.
Q10.Jiban Ltd. invited applications for 15,000 equity shares of Rs 100 each at a premium of
10% payable as: on application Rs 25 per share, on allotment (including premium) Rs 50 per
share, on first and final call Rs 35 per share. Applications were received for 15,000 shares
and application money for 500 shares was refunded. Allotment was made in full on all other
applications. All money due was received except the first and final call on 200 shares which
were forfeited after necessary legal formalities. Of the forfeited shares, 150 shares were
reissued at Rs 105 as fully paid-up. Pass necessary Journal entries in the books of Jiban Ltd.
Q11. The directors of Google Ltd. invited applications for 2,00,000 equity shares of Rs 20
lakhs to be issued at 20% premium. The instalments payable on each share are as follows:
On application Rs 5, on allotment Rs 4 (including premium of Rs 2), On first call Rs 2 and on
final call Re 1.
Applications were received for 2,40,000 shares and allotment was made as follows:
(a) to applicants for 1,00,000 shares in full.
(b) to applicants for 80,000 shares - 60,000 shares.
(c) to applicants for 60,000 shares - 40,000 shares.

An applicant for 1,000 shares falling in category (a) and holders of 900 shares falling in
category (b) failed to pay allotment money. These shares were forfeited on failure to pay
allotment money. An applicant for 1,800 shares falling in category (c) failed to pay both the
calls and these shares were forfeited after final call. 1,500 shares [1,100 of category (a) and
500 of category (b)] were reissued at Rs 11 per share as fully paid-up. Prepare Journal entries
of the above transactions in the books of the company.

Q12. Bengal Ltd. was registered with an authorised capital of Rs 5,00,000 divided into
30,000 equity shares of Rs 10 each and 4,000, 10% preference shares of Rs 50 each.
The company made an issue of 15,000 equity shares at a premium of Rs 5 per share payable
as follows:
On application Rs 5 per share (including Rs 2 as premium)
On allotment Rs 6 per share (including Rs 3 as premium)
On first call Rs 2 per share
On final call Balance
Applications were received for 24,000 shares. No allotment was made to the applicants of
4,000 shares and the amount received thereon was refunded. The rest of the applicants were
issued shares on pro-rata basis. Mr. A who had applied for 120 shares failed to pay allotment
and call moneys. Mr. B who had applied for 80 shares failed to pay two calls and Mr. C to
whom 45 shares were allotted failed to pay the final call money. Shares of Mr. A, Mr. B and
Mr. C were forfeited after the final call was made. 160 of the forfeited shares (including
whole of A and B and balance of C) were reissued to Mr. D at Rs 12 per share. Show the
Journal entries in the books of the Company.