Class 12th Accounts: Share Capital Solutions Explained Simply

Class 12th Accounts: Share Capital Solutions Explained Simply

In this blog post, we will solve three problems related to Share Capital for Class 12th Accounts. We will explain each step clearly so you can easily understand how to prepare Balance Sheets and handle journal entries. Let's begin!

9. Red Roses Ltd. - Share Capital Calculation

Question:
Red Roses Ltd. was registered with a capital of ₹25,00,000, divided into 25,000 Equity Shares of ₹100 each. The company issued 15,000 Equity Shares to the public for subscription. The shares were subscribed, and calls were made and received, except for the allotment money of ₹40 on 100 shares held by Parul. The first and final call of ₹20 on 500 shares was also not received. Prepare the Balance Sheet showing Share Capital.

Solution:

Step 1: Determine the total Share Capital of the company.

The total capital is ₹25,00,000, divided into 25,000 shares of ₹100 each. But, only 15,000 shares were issued to the public.

Step 2: Identify the paid-up capital and unpaid capital.

• For the 15,000 shares, ₹100 per share should be received.
• Out of the 15,000 shares, the allotment money of ₹40 is not received on 100 shares, and the final call of ₹20 is unpaid on 500 shares.

Paid-up Capital: (15,000 shares × ₹100) - (₹40 × 100 shares) - (₹20 × 500 shares) = ₹14,50,000

Not Fully Paid-up Capital: ₹40 on 100 shares and ₹20 on 500 shares = ₹36,000

Calls-in-Arrears: ₹40 × 100 shares = ₹14,000

Answer: The Balance Sheet will show:

• Subscribed and Fully Paid-up Capital: ₹14,50,000
• Subscribed But Not Fully Paid-up Capital: ₹36,000
• Calls-in-Arrears: ₹14,000

10. East India Hotels Ltd. - Share Capital Calculation

Question:
East India Hotels Ltd. was registered with an authorized capital of ₹25,00,000, divided into 2,50,000 Equity Shares of ₹10 each. It issued 1,50,000 Equity Shares to the public for subscription. The shares were subscribed, and calls were made and received. However, the first and final call of ₹3 per share was not paid. Paresh, the holder of 5,000 shares, did not pay the final call. Prepare the Balance Sheet of the company showing Share Capital.

Solution:

Step 1: Total authorized capital = ₹25,00,000 (divided into 2,50,000 shares of ₹10 each).

Step 2: Calculate the Share Capital received.

• The total shares issued were 1,50,000.
• All the allotment money was received, but the final call of ₹3 was not made by Paresh on 5,000 shares.

Paid-up Capital: (1,50,000 shares × ₹10) = ₹15,00,000 (All money received on these shares).

Not Fully Paid-up Capital: ₹3 × 5,000 = ₹15,000.

Answer: The Balance Sheet will show:

• Subscribed But Not Fully Paid-up Capital: ₹10,50,000
• Calls-in-Advance: ₹15,000

11. Amit Ltd. - Journal Entries and Share Capital Calculation

Question:
Amit Ltd. was registered with a capital of ₹5,00,000 in shares of ₹10 each. The company issued 20,000 such shares at a premium of ₹2 per share, payable ₹2 per share on application, ₹5 per share on allotment (including premium), and ₹2 per share on the first call made three months later. All the money payable on application and allotment was duly received, but when the first call was made, one shareholder paid the entire balance on 300 shares, while another shareholder holding 1,000 shares failed to pay the first call money. Prepare journal entries to record the above transactions and show how they will be shown in the Balance Sheet.

Solution:

Step 1: Calculate the amount payable by each shareholder and determine the balance for unpaid calls.

• The total capital is ₹5,00,000, divided into 50,000 shares of ₹10 each.
• Premium of ₹2 per share = ₹2 × 20,000 shares = ₹40,000.
• Application and allotment amounts are duly paid, but the first call money on 1,000 shares is unpaid.

Journal Entries:

      Dr. Bank Account  ₹1,00,000
          Cr. Share Capital Account  ₹1,00,000 (For amount received on application and allotment)

      Dr. Share Capital Account  ₹10,000
          Cr. Calls-in-Arrears Account  ₹10,000 (For unpaid first call on 1,000 shares)

      Dr. Calls-in-Arrears Account  ₹10,000
          Cr. Share Capital Account  ₹10,000 (For forfeiting the unpaid shares)
      

Answer: The Balance Sheet will show:

• Total Share Capital: ₹1,78,900

These solutions are explained in detail to help students understand Class 12th Accounts Share Capital topics and Balance Sheet preparation. For more solutions, stay tuned!