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Chapter 2

Accounting for shares

NEB Class 12 past exam questions

Past questions and answers

23 questions set from this chapter, 1 of them more than once. Most repeated first.

  • Asked 2 times
  • 2082 Supplementary · 5 marks
  • 2081 Baishakh · 5 marks

A Company issued 20,000 shares of Rs. 100 each at a discount of 10%.
On application — Rs. 30 per share On allotment — Rs. 30 per share On first and final call — Rs. 30 per share
Applications were received for 28,000 shares and allotment were made as under:
8,000 applicants — 8,000 shares 16,000 applicants — 12,000 shares 4,000 applicants — Nil
It is resolved that the excess amount paid on application is to be adjusted against amount due on allotment.
All money were duly received except a shareholder holding 800 shares, failed to pay first and final call money.
Required: Entries for Application, Allotment and Final call.

Answer

Working notes

  • Issue price = Rs 100 − Rs 10 = Rs 90 per share; discount = Rs 10 per share. Rs 90 is paid as Rs 30 + Rs 30 + Rs 30.
  • Application money received = 28,000 × Rs 30 = Rs 8,40,000.
  • Rejected 4,000 applicants refunded = 4,000 × Rs 30 = Rs 1,20,000.
  • Application money kept on 20,000 shares = 20,000 × Rs 30 = Rs 6,00,000.
  • Excess from the 16,000 applicants (4,000 shares not allotted) = 4,000 × Rs 30 = Rs 1,20,000, adjusted against allotment.
  • Check: 6,00,000 + 1,20,000 + 1,20,000 = Rs 8,40,000.
  • Allotment: cash due Rs 30 × 20,000 = Rs 6,00,000; discount Rs 10 × 20,000 = Rs 2,00,000; so Share Capital credited Rs 8,00,000.
  • Call: 20,000 × Rs 30 = Rs 6,00,000; unpaid on 800 shares = 800 × Rs 30 = Rs 24,000.

Journal entries

ParticularsDr (Rs)Cr (Rs)
(a) Share application
Bank A/c Dr.8,40,000
  To Share Application A/c8,40,000
(Application money received on 28,000 shares @ Rs 30)
Share Application A/c Dr.8,40,000
  To Share Capital A/c6,00,000
  To Share Allotment A/c1,20,000
  To Bank A/c1,20,000
(Application money transferred to capital, excess adjusted on allotment, rejected applicants refunded)
(b) Share allotment
Share Allotment A/c Dr.6,00,000
Discount on Issue of Shares A/c Dr.2,00,000
  To Share Capital A/c8,00,000
(Allotment money due on 20,000 shares @ Rs 30 and discount @ Rs 10)
Bank A/c Dr.4,80,000
  To Share Allotment A/c4,80,000
(Allotment money received after adjusting Rs 1,20,000 of excess application money)
(c) First and final call
Share First and Final Call A/c Dr.6,00,000
  To Share Capital A/c6,00,000
(Call money due on 20,000 shares @ Rs 30)
Bank A/c Dr.5,76,000
Calls-in-Arrears A/c Dr.24,000
  To Share First and Final Call A/c6,00,000
(Call money received except on 800 shares)

Answer checked by Claude Sonnet · Oct 21, 2026

Test yourself · 2 MCQs

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  • 2083 Baishakh · 1 mark

Define paid up capital.

Answer

Paid-up capital is the portion of a company's subscribed (issued) capital that shareholders have actually paid to the company.

Answer checked by Claude Sonnet · Oct 21, 2026

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  • 2083 Baishakh · 1 mark

Prepare adjustment entry of Rs. 20,000 for proposed dividend.

Answer

ParticularsDr (Rs)Cr (Rs)
Profit and Loss Appropriation A/c Dr.20,000
  To Proposed Dividend A/c20,000
(Being dividend proposed for the year)

Proposed dividend is an appropriation of profit, so it is debited to the Profit and Loss Appropriation A/c and shown as a current liability until it is approved and paid.

Answer checked by Claude Sonnet · Oct 21, 2026

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  • 2083 Baishakh · 2+2+1 marks

A company issued 10,000 share of Rs.100 each at 10% premium as follows:
On application　　　　　　　　　Rs. 20 On allotment　　　　　　　　　　Rs. 50 First and final call　　　　　　　Rs. 40
Application were received for 15,000 share, 3,000 share were rejected and refunded and remaining application were allotted on pro-rata basis. One shareholder holding 500 share failed to pay first and final call money.
Required: Journal voucher for (a) Share allotment (b) Share first and final call (c) Share forfeiture

Answer

Working notes

  • Issue price = Rs 100 + 10% premium = Rs 110 (application Rs 20 + allotment Rs 50 + call Rs 40). The premium of Rs 10 is collected with allotment.
  • Application money received = 15,000 × Rs 20 = Rs 3,00,000; refund of 3,000 shares = Rs 60,000.
  • Retained on 12,000 shares = Rs 2,40,000; required on 10,000 shares = Rs 2,00,000; excess adjusted on allotment = Rs 40,000.
  • Allotment due = 10,000 × Rs 50 = Rs 5,00,000 (Share Capital Rs 4,00,000, Securities Premium Rs 1,00,000).
  • Call due = 10,000 × Rs 40 = Rs 4,00,000; unpaid on 500 shares = Rs 20,000.

Journal entries

ParticularsDr (Rs)Cr (Rs)
(a) Share allotment
Share Application A/c Dr.3,00,000
  To Share Capital A/c2,00,000
  To Share Allotment A/c40,000
  To Bank A/c60,000
(Application money transferred to capital, excess adjusted, 3,000 shares refunded)
Share Allotment A/c Dr.5,00,000
  To Share Capital A/c4,00,000
  To Securities Premium A/c1,00,000
(Allotment money due on 10,000 shares @ Rs 50 including premium Rs 10)
Bank A/c Dr.4,60,000
  To Share Allotment A/c4,60,000
(Allotment money received after adjusting Rs 40,000)
(b) First and final call
Share First and Final Call A/c Dr.4,00,000
  To Share Capital A/c4,00,000
(Call money due on 10,000 shares @ Rs 40)
Bank A/c Dr.3,80,000
Calls-in-Arrears A/c Dr.20,000
  To Share First and Final Call A/c4,00,000
(Call money received except on 500 shares)
(c) Share forfeiture
Share Capital A/c Dr.50,000
  To Calls-in-Arrears A/c20,000
  To Forfeited Shares A/c30,000
(500 shares of Rs 100 forfeited for non-payment of call; Rs 60 per share capital had been paid)

The premium of Rs 10 per share was already received on allotment, so it stays in Securities Premium A/c.

Answer checked by Claude Sonnet · Oct 21, 2026

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  • 2083 Baishakh · 1+1 marks

A company issued 8,000 share @ Rs. 100 each for the purchase of following assets.
Land　　　　　　　　　Rs. 7,80,000 Closing stock　　　　　Rs. 40,000
Required: Journal entries for assets purchase by issuing shares.

Answer

Working notes

  • Total value of assets = Rs 7,80,000 + Rs 40,000 = Rs 8,20,000.
  • Shares issued = 8,000 × Rs 100 = Rs 8,00,000.
  • Balance paid to the vendor in cash = Rs 8,20,000 − Rs 8,00,000 = Rs 20,000.
ParticularsDr (Rs)Cr (Rs)
Land A/c Dr.7,80,000
Stock A/c Dr.40,000
  To Vendor A/c8,20,000
(Being assets purchased from the vendor)
Vendor A/c Dr.8,20,000
  To Share Capital A/c8,00,000
  To Bank A/c20,000
(Being 8,000 shares of Rs 100 issued and the balance paid in cash)

Answer checked by Claude Sonnet · Oct 21, 2026

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  • 2082 Baishakh · 5 marks

A Company issued 6,000 shares of Rs. 100 each payable as follows:
On application: Rs. 30
On allotment: Rs. 45
On first and final call: Rs. 25
Applications were received for 9,000 shares. Among them, applicants for 3,000 shares were allotted in full, 4,000 applicants were allotted on a pro-rata basis, and the rest were refunded. Excess application money was adjusted on subsequent calls. All money was duly received except the final call money on 500 shares.
Required:
a) Share application
b) Share allotment
c) First and final call

Answer

Working Note:

Total applications received = 9,000 shares.
Shares allotted = 6,000 shares.
Applicants for 3,000 shares were allotted in full.
Applicants for 4,000 shares were allotted on pro-rata basis and received 3,000 shares.
Rest 2,000 applicants were refunded.

Excess application money from pro-rata applicants:

=4,000×Rs. 30−3,000×Rs. 30=Rs. 30,000= 4{,}000 \times \text{Rs. }30 - 3{,}000 \times \text{Rs. }30 = \text{Rs. }30{,}000

This excess is adjusted on allotment.

(a) Share Application

DateParticularsL.F.Debit (Rs.)Credit (Rs.)
Bank A/c2,70,000
    To Share Application A/c2,70,000
(Being application money received on 9,000 shares @ Rs. 30 each)
Share Application A/c2,70,000
    To Share Capital A/c1,80,000
    To Share Allotment A/c30,000
    To Bank A/c60,000
(Being application money transferred to share capital, excess adjusted on allotment and balance refunded on 2,000 shares)

(b) Share Allotment

DateParticularsL.F.Debit (Rs.)Credit (Rs.)
Share Allotment A/c2,70,000
    To Share Capital A/c2,70,000
(Being allotment money due on 6,000 shares @ Rs. 45 each)
Bank A/c2,40,000
    To Share Allotment A/c2,40,000
(Being allotment money received after adjusting excess application money of Rs. 30,000)

(c) First and Final Call

DateParticularsL.F.Debit (Rs.)Credit (Rs.)
Share First and Final Call A/c1,50,000
    To Share Capital A/c1,50,000
(Being first and final call money due on 6,000 shares @ Rs. 25 each)
Bank A/c1,37,500
Calls-in-Arrears A/c12,500
    To Share First and Final Call A/c1,50,000
(Being call money received on 5,500 shares and Rs. 12,500 remained in arrears on 500 shares)

Note: The amount due on the final call from 500 shares, i.e. (500 \times \text{Rs. }25 = \text{Rs. }12{,}500), has been transferred to Calls-in-Arrears A/c. It will be realised when the defaulting shareholders pay, or the shares will be forfeited as per the company’s policy.

Answer checked by Claude Sonnet · Oct 21, 2026

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  • 2082 Baishakh · 5 marks

P Company issued shares of Rs. 100 each at 10% discount to purchase the following assets from S Company:
Plant and machinery: Rs. 6,00,000
Furniture: Rs. 2,00,000
Inventory: Rs. 1,00,000
Required:
Journal entries for assets purchased by issuing shares.

Answer

Given: Shares of Rs 100 each issued at 10% discount → issue price = Rs 100 − Rs 10 = Rs 90 per share

Total purchase consideration = 6,00,000 + 2,00,000 + 1,00,000 = Rs 9,00,000

Number of shares to be issued = 9,00,000 ÷ 90 = 10,000 shares

Face value of shares issued = 10,000 × Rs 100 = Rs 10,00,000 Discount allowed = 10,000 × Rs 10 = Rs 1,00,000

Journal Entries in the books of P Company

DateParticularsL.F.Debit (Rs)Credit (Rs)
Plant and Machinery A/c Dr.6,00,000
Furniture A/c Dr.2,00,000
Inventory A/c Dr.1,00,000
    To S Company A/c9,00,000
(Being assets purchased from S Company)
S Company A/c Dr.9,00,000
Discount on Issue of Shares A/c Dr.1,00,000
    To Share Capital A/c10,00,000
(Being 10,000 shares of Rs 100 each issued at 10% discount in discharge of purchase consideration)

Working note: Discount on issue of shares is a capital loss; it is shown as "Other Expenses" in the Statement of Profit and Loss or written off against Securities Premium / General Reserve.

Answer checked by Claude Sonnet · Oct 21, 2026

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  • 2082 Supplementary · 1 mark

What is ordinary share?

Answer

Ordinary shares, also known as equity shares, are the shares that represent the basic ownership of a company. Their holders have voting rights in company meetings and a claim on dividends and residual assets only after preference shareholders are paid.

Answer checked by Claude Sonnet · Oct 21, 2026

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  • 2082 Supplementary · 2 marks

P Company Ltd. issued 2,000 shares of Rs. 100 each at a premium of 10% to Q Company Ltd. for purchase of the following assets:
Machinery — Rs. 2,00,000 Furniture — Rs. 1,60,000
Required: Journal entries for purchase of assets and issue of share.

Answer

Working notes

  • Premium = 10% of Rs 100 = Rs 10 per share; issue price = Rs 110.
  • Value of shares issued = 2,000 × Rs 110 = Rs 2,20,000 (Share Capital Rs 2,00,000 + Securities Premium Rs 20,000).
  • Total assets purchased = Rs 2,00,000 + Rs 1,60,000 = Rs 3,60,000.
  • Balance paid to Q Company Ltd. in cash = Rs 3,60,000 − Rs 2,20,000 = Rs 1,40,000.
ParticularsDr (Rs)Cr (Rs)
Machinery A/c Dr.2,00,000
Furniture A/c Dr.1,60,000
  To Q Company Ltd. A/c3,60,000
(Being assets purchased from Q Company Ltd.)
Q Company Ltd. A/c Dr.2,20,000
  To Share Capital A/c2,00,000
  To Securities Premium A/c20,000
(Being 2,000 shares of Rs 100 issued at 10% premium)
Q Company Ltd. A/c Dr.1,40,000
  To Bank A/c1,40,000
(Being balance of purchase price paid in cash)

Answer checked by Claude Sonnet · Oct 21, 2026

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  • 2081 Baishakh · 1 mark

State any two types of preference share.

Answer

Redeemable preference shares and cumulative preference shares.

(Other acceptable pairs: participating and non-participating; convertible and non-convertible; cumulative and non-cumulative.)

Answer checked by Claude Sonnet · Oct 21, 2026

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  • 2081 Baishakh · 3 marks

A company purchased the following assets at an agreed price of Rs. 5,50,000:
  • Plant: Rs. 2,60,000
  • Building: Rs. 3,65,000
The company paid the agreed price by issuing shares of Rs. 100 each at 10% premium.
Required:
Entries for purchase of assets and issue of shares.

Similar questions: A company purchased the following assets at

Answer

Working notes

  • Issue price = Rs 100 + 10% = Rs 110; shares issued = Rs 5,50,000 ÷ Rs 110 = 5,000 shares.
  • Share Capital = 5,000 × Rs 100 = Rs 5,00,000; Securities Premium = 5,000 × Rs 10 = Rs 50,000.
  • Assets taken over = Rs 2,60,000 + Rs 3,65,000 = Rs 6,25,000, which exceeds the agreed price of Rs 5,50,000. The excess of Rs 75,000 is a capital profit, credited to Capital Reserve.
ParticularsDr (Rs)Cr (Rs)
Plant A/c Dr.2,60,000
Building A/c Dr.3,65,000
  To Vendor A/c5,50,000
  To Capital Reserve A/c75,000
(Being assets purchased at the agreed price of Rs 5,50,000)
Vendor A/c Dr.5,50,000
  To Share Capital A/c5,00,000
  To Securities Premium A/c50,000
(Being 5,000 shares of Rs 100 issued at 10% premium to the vendor)

Answer checked by Claude Sonnet · Oct 21, 2026

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  • 2080 Baishakh · 1 mark

State the meaning of calls in advance.

Answer

Calls in advance means the amount of money received by a company from shareholders before the amount has actually been called up (demanded) by the company. It is a liability of the company, shown under "Current Liabilities" in the balance sheet.

Answer checked by Claude Sonnet · Oct 21, 2026

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  • 2080 Baishakh · 5 marks

XYZ company issued 10,000 shares of Rs. 100 each at Rs. 10 premium payable as under.
On application: Rs. 30 On allotment: Rs. 40 (with premium) On first and final call: Rs. 40
Applications were received for 16,000 shares. No allotment was made to the applicants for 4,000 shares. Rest was allotted on pro-rata basis. All calls were duly made and received except one share holder holding 400 shares paid the full value of shares on allotment.
Required: a) Share application b) Share allotment c) Share first and final call

Answer

Working notes

  • Application money received = 16,000 × Rs 30 = Rs 4,80,000; refund to the 4,000 rejected = Rs 1,20,000.
  • Pro-rata allotment: 12,000 shares applied, 10,000 allotted (5 : 6). Excess = 2,000 × Rs 30 = Rs 60,000, adjusted on allotment. Money kept on 10,000 shares = Rs 3,00,000.
  • Allotment due = 10,000 × Rs 40 = Rs 4,00,000 (Share Capital Rs 3,00,000 + Securities Premium Rs 1,00,000).
  • The holder of 400 shares paid the call money (400 × Rs 40 = Rs 16,000) along with allotment, so it is Calls-in-Advance.
  • Cash received on allotment = (4,00,000 − 60,000) + 16,000 = Rs 3,56,000.
  • First and final call due = 10,000 × Rs 40 = Rs 4,00,000; received in cash = 4,00,000 − 16,000 = Rs 3,84,000.
ParticularsDr (Rs)Cr (Rs)
(a) Share application
Bank A/c Dr.4,80,000
  To Share Application A/c4,80,000
(Application money received on 16,000 shares @ Rs 30)
Share Application A/c Dr.4,80,000
  To Share Capital A/c3,00,000
  To Share Allotment A/c60,000
  To Bank A/c1,20,000
(Application money transferred, excess adjusted, rejected applicants refunded)
(b) Share allotment
Share Allotment A/c Dr.4,00,000
  To Share Capital A/c3,00,000
  To Securities Premium A/c1,00,000
(Allotment money due on 10,000 shares @ Rs 40 including premium Rs 10)
Bank A/c Dr.3,56,000
  To Share Allotment A/c3,40,000
  To Calls-in-Advance A/c16,000
(Allotment money received after adjusting excess application money; call paid in advance on 400 shares)
(c) First and final call
Share First and Final Call A/c Dr.4,00,000
  To Share Capital A/c4,00,000
(Call money due on 10,000 shares @ Rs 40)
Bank A/c Dr.3,84,000
Calls-in-Advance A/c Dr.16,000
  To Share First and Final Call A/c4,00,000
(Call money received; advance adjusted)

Answer checked by Claude Sonnet · Oct 21, 2026

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  • 2080 Baishakh · 3 marks

A company Ltd. issued 9,000 shares of Rs. 100 each at a premium of Rs. 10 per share to purchase the following assets:
Land and Building: Rs. 6,50,000 Office Equipment: Rs. 3,40,000
Required: Entries for purchase of assets and issue of shares

Answer

Working notes

  • Issue price = Rs 100 + Rs 10 = Rs 110.
  • Value of shares issued = 9,000 × Rs 110 = Rs 9,90,000 = value of assets (Rs 6,50,000 + Rs 3,40,000).
  • Share Capital = 9,000 × Rs 100 = Rs 9,00,000; Securities Premium = 9,000 × Rs 10 = Rs 90,000.
ParticularsDr (Rs)Cr (Rs)
Land and Building A/c Dr.6,50,000
Office Equipment A/c Dr.3,40,000
  To Vendor A/c9,90,000
(Being assets purchased)
Vendor A/c Dr.9,90,000
  To Share Capital A/c9,00,000
  To Securities Premium A/c90,000
(Being 9,000 shares of Rs 100 issued at Rs 10 premium in payment)

Answer checked by Claude Sonnet · Oct 21, 2026

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  • 2079 Jestha · 1 mark

Write about authorised capital.

Answer

Authorised capital is the maximum amount of capital that a company is authorised to raise by issuing shares, as stated in its Memorandum of Association. It is also called registered capital or nominal capital. The company cannot issue shares beyond this limit without altering its Memorandum.

Answer checked by Claude Sonnet · Oct 21, 2026

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  • 2079 Jestha · 5 marks

P Company Ltd. issued 10,000 shares of Rs. 100 each at 10% discount payable as follows: On application — Rs. 35 On allotment — Rs. 40 On final call — Rs. 15
Applications were received for 15,000 shares. 2,000 applicants were allotted in full and balance applicants were allotted on pro-rata basis. All call money were duly received except on final call money on 400 shares.
Required: Journal entry for a. Share application b. Share allotment c. Share final call

Answer

Working notes

  • Issue price = Rs 100 − Rs 10 = Rs 90 (application Rs 35 + allotment Rs 40 + final call Rs 15). The discount of Rs 10 is adjusted at allotment, so Share Capital credited on allotment is Rs 50 per share.
  • Application money received = 15,000 × Rs 35 = Rs 5,25,000.
  • 2,000 shares allotted in full; the other 13,000 applicants get 8,000 shares pro rata (13 : 8). Excess = 5,000 × Rs 35 = Rs 1,75,000, adjusted on allotment. Money kept on 10,000 shares = Rs 3,50,000.
  • Allotment: cash due 10,000 × Rs 40 = Rs 4,00,000; discount 10,000 × Rs 10 = Rs 1,00,000; cash received = 4,00,000 − 1,75,000 = Rs 2,25,000.
  • Final call due = 10,000 × Rs 15 = Rs 1,50,000; unpaid on 400 shares = Rs 6,000.
ParticularsDr (Rs)Cr (Rs)
(a) Share application
Bank A/c Dr.5,25,000
  To Share Application A/c5,25,000
(Application money received on 15,000 shares @ Rs 35)
Share Application A/c Dr.5,25,000
  To Share Capital A/c3,50,000
  To Share Allotment A/c1,75,000
(Application money transferred; excess adjusted on allotment)
(b) Share allotment
Share Allotment A/c Dr.4,00,000
Discount on Issue of Shares A/c Dr.1,00,000
  To Share Capital A/c5,00,000
(Allotment due on 10,000 shares @ Rs 40 and discount @ Rs 10)
Bank A/c Dr.2,25,000
  To Share Allotment A/c2,25,000
(Allotment money received after adjusting Rs 1,75,000)
(c) Share final call
Share Final Call A/c Dr.1,50,000
  To Share Capital A/c1,50,000
(Final call due on 10,000 shares @ Rs 15)
Bank A/c Dr.1,44,000
Calls-in-Arrears A/c Dr.6,000
  To Share Final Call A/c1,50,000
(Final call received except on 400 shares)

Answer checked by Claude Sonnet · Oct 21, 2026

Test yourself · 2 MCQs

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  • 2079 Jestha · 5 marks

a. Himal Company issued 1,000 shares at Rs. 50 per share including premium of Rs. 10 each to acquire plant of Rs. 1,00,000.
Required: Entry for purchase of plant by issuing share.

Answer

Journal Entry

ParticularsL.F.Debit (Rs.)Credit (Rs.)
Plant A/c ........................ Dr.1,00,000
    To Share Capital A/c40,000
    To Securities Premium A/c10,000
    To Vendor A/c50,000
(Being plant purchased for Rs. 1,00,000; 1,000 shares of Rs. 40 each issued at a premium of Rs. 10 and balance payable to vendor)

Working Note

  • Face value per share = Rs. 50 − Rs. 10 = Rs. 40
  • Share capital = 1,000 shares × Rs. 40 = Rs. 40,000
  • Securities premium = 1,000 shares × Rs. 10 = Rs. 10,000
  • Amount settled by shares = 1,000 shares × Rs. 50 = Rs. 50,000
  • Balance payable to vendor = Rs. 1,00,000 − Rs. 50,000 = Rs. 50,000

Answer checked by Claude Sonnet · Oct 21, 2026

Test yourself · 2 MCQs

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  • 2079 Model Set B · 1 mark

Write the meaning of called up capital.

Answer

Called up capital is the part of the subscribed capital that the company has actually demanded (called) from its shareholders, in instalments such as application, allotment and calls. The part not yet demanded is uncalled capital.

Answer checked by Claude Sonnet · Oct 21, 2026

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  • 2079 Model Set B · 2+1+1+1 marks

A company forfeited 800 shares out of 5,000 shares of Rs. 100 each issued at 10% premium due to non-payment of first and final call money of Rs. 30. These shares were subsequently re-issued at Rs. 85 per share as fully paid up.
Required: Entries for share final call, forfeiture, re-issue and transfer.

Answer

Working notes

  • Issue price = Rs 100 + Rs 10 premium = Rs 110. The first and final call is Rs 30, so Rs 80 (including the Rs 10 premium) was already received before the call. Capital paid up before the call is Rs 70 per share.
  • Call due = 5,000×30=5{,}000 \times 30 = Rs 1,50,000. Unpaid on 800 shares = 800×30=800 \times 30 = Rs 24,000, so cash received = Rs 1,26,000.
  • Forfeited shares account = 800×70=800 \times 70 = Rs 56,000.
  • Loss on re-issue = 800×(100−85)=800 \times (100 - 85) = Rs 12,000.
ParticularsDr (Rs)Cr (Rs)
(a) Final call
Share First and Final Call A/c Dr.1,50,000
  To Share Capital A/c1,50,000
(Call money due on 5,000 shares @ Rs 30)
Bank A/c Dr.1,26,000
Calls-in-Arrears A/c Dr.24,000
  To Share First and Final Call A/c1,50,000
(Call money received except on 800 shares)
(b) Forfeiture
Share Capital A/c Dr.80,000
  To Calls-in-Arrears A/c24,000
  To Forfeited Shares A/c56,000
(800 shares forfeited for non-payment of call)
(c) Re-issue
Bank A/c Dr.68,000
Forfeited Shares A/c Dr.12,000
  To Share Capital A/c80,000
(800 shares re-issued @ Rs 85 as fully paid)
(d) Transfer
Forfeited Shares A/c Dr.44,000
  To Capital Reserve A/c44,000
(Balance of forfeited shares transferred to capital reserve)

The premium of Rs 10 per share had already been received, so Securities Premium is left untouched. Balance of forfeited shares = Rs 56,000 − Rs 12,000 = Rs 44,000.

Answer checked by Claude Sonnet · Oct 21, 2026

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  • 2079 Model Set B · 2 marks

X Company purchased the following assets of Y Company at an agreed price of Rs. 550,000.
ParticularsRs.
Machinery300,000
Debtors100,000
Inventories150,000
X Company paid the purchase price by issuing shares of Rs. 100 each at a premium of 10%.
Required: Entry for purchase of above assets by issuing shares.

Answer

Working notes

  • Issue price = Rs 100 + 10% premium = Rs 110.
  • Number of shares = 5,50,000÷110=5,0005{,}50{,}000 \div 110 = 5{,}000 shares.
  • Share capital = 5,000×100=5{,}000 \times 100 = Rs 5,00,000; securities premium = 5,000×10=5{,}000 \times 10 = Rs 50,000.
ParticularsDr (Rs)Cr (Rs)
Machinery A/c Dr.3,00,000
Debtors A/c Dr.1,00,000
Inventories A/c Dr.1,50,000
  To Y Company A/c5,50,000
(Being assets purchased from Y Company)
Y Company A/c Dr.5,50,000
  To Share Capital A/c5,00,000
  To Securities Premium A/c50,000
(Being 5,000 shares of Rs 100 issued at 10% premium in payment)

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  • NEB Class 12 2079 Accounting Model Question Set A · 2 marks

A company purchased the following assets at an agreed price of Rs. 1,100,000: Plant Rs. 520,000 Land and Building Rs. 730,000 The company paid the agreed price by issuing shares of Rs. 100 each at 20% discount. Required: Entries for purchase of assets and issue of share

Similar questions: A company purchased the following assets at (2081 Baishakh)

Answer

Working notes

  • Issue price = Rs 100 − 20% = Rs 80; shares issued = Rs 11,00,000 ÷ Rs 80 = 13,750 shares.
  • Share Capital = 13,750 × Rs 100 = Rs 13,75,000; Discount on issue = 13,750 × Rs 20 = Rs 2,75,000.
  • Assets taken over = Rs 5,20,000 + Rs 7,30,000 = Rs 12,50,000, which exceeds the agreed price of Rs 11,00,000. The excess of Rs 1,50,000 is credited to Capital Reserve.
ParticularsDr (Rs)Cr (Rs)
Plant A/c Dr.5,20,000
Land and Building A/c Dr.7,30,000
  To Vendor A/c11,00,000
  To Capital Reserve A/c1,50,000
(Being assets purchased at the agreed price of Rs 11,00,000)
Vendor A/c Dr.11,00,000
Discount on Issue of Shares A/c Dr.2,75,000
  To Share Capital A/c13,75,000
(Being 13,750 shares of Rs 100 issued at 20% discount to the vendor)

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  • NEB Class 12 2079 Accounting Model Question Set A · 1 mark

Write the meaning of cumulative preference share.

Answer

Cumulative preference shares are preference shares on which unpaid dividends accumulate and must be paid in full before any dividend is paid to equity shareholders.

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  • NEB Class 12 2079 Accounting Model Question Set A · 5 marks

A Company Ltd. invited application for 30,000 shares of Rs. 100 each at 10% premium, payable as under: On application Rs. 30 On allotment Rs. 40 On first and final call Rs. 40 Applications were received for 42,000 shares. The board of directors decided to allot 25,000 applicants in full, 10,000 applicants 50% and 7,000 applicants were rejected. It was decided to utilize excess application money in part payment of allotment. All money were duly received except a shareholder holding 200 shares failed to pay first and final call money. Required: Entries for: i) Share application ii) Share allotment iii) Share first and final call. [1.5+2+1.5=5]

Answer

Working notes

  • Issue price = Rs 110 (application Rs 30 + allotment Rs 40 + call Rs 40); premium Rs 10 is collected with allotment.
  • Shares allotted: 25,000 (in full) + 50% of 10,000 = 5,000, total 30,000.
  • Application money received = 42,000 × Rs 30 = Rs 12,60,000. Required on 30,000 shares = Rs 9,00,000.
  • Refund to the 7,000 rejected = Rs 2,10,000. Excess from the 50% group = 5,000 × Rs 30 = Rs 1,50,000, adjusted on allotment.
  • Allotment due = 30,000 × Rs 40 = Rs 12,00,000 (Share Capital Rs 9,00,000 + Securities Premium Rs 3,00,000); cash = 12,00,000 − 1,50,000 = Rs 10,50,000.
  • Call due = 30,000 × Rs 40 = Rs 12,00,000; unpaid on 200 shares = Rs 8,000.
ParticularsDr (Rs)Cr (Rs)
(i) Share application
Bank A/c Dr.12,60,000
  To Share Application A/c12,60,000
(Application money received on 42,000 shares @ Rs 30)
Share Application A/c Dr.12,60,000
  To Share Capital A/c9,00,000
  To Share Allotment A/c1,50,000
  To Bank A/c2,10,000
(Application money transferred, excess adjusted, 7,000 rejected applicants refunded)
(ii) Share allotment
Share Allotment A/c Dr.12,00,000
  To Share Capital A/c9,00,000
  To Securities Premium A/c3,00,000
(Allotment due on 30,000 shares @ Rs 40 including premium Rs 10)
Bank A/c Dr.10,50,000
  To Share Allotment A/c10,50,000
(Allotment money received after adjusting Rs 1,50,000)
(iii) First and final call
Share First and Final Call A/c Dr.12,00,000
  To Share Capital A/c12,00,000
(Call due on 30,000 shares @ Rs 40)
Bank A/c Dr.11,92,000
Calls-in-Arrears A/c Dr.8,000
  To Share First and Final Call A/c12,00,000
(Call received except on 200 shares)

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Questions from NEB Class 12 2083 Accounting (Board exam, Baishakh 2083), NEB Class 12 2082 Accounting (Board exam, Baishakh 2082), NEB Class 12 2082 Accounting Supplementary Set A (Grade-increment / supplementary exam, Set A), NEB Class 12 2081 Accounting (Board exam, Baishakh 2081), NEB Class 12 2080 Accounting (Board exam, Baishakh 2080), NEB Class 12 2079 Accounting (Board exam, Jestha 2079), NEB Class 12 2079 Accounting Model Question Set A (NEB model paper, Set A) and NEB Class 12 2079 (2023) Accounting 1041 Model Question Set B (NEB model question paper, Set B, 2079 (2023); Set A is already on the site as neb-model-2079). Answers are written for this site; check them against your class notes.

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