CBSE Class 12 Accountancy Accounting for Share Capital VBQs Set 03

Question. Arrange the following in proper sequence as types of “Share Capital”:
(i) Paid up Capital
(ii) Issued Capital
(iii) Subscribed Capital
(iv) Called up Capital
Choose the correct option :
(a) (ii) - (iii) - (iv) - (i)
(b) (i) - (ii) - (iii) - (iv)
(c) (i) - (ii) - (iii) - (iv)
(d) (iv) - (i) - (ii) - (iii)
Answer: (a) (ii) - (iii) - (iv) - (i)

Question. When forfeited shares are re-issued the amount of discount allowed on these shares cannot exeed:
(a) 10% of called-up capital per share
(b) 6% of paid-up capital per share
(c) The amount received per share on forfeited shares
(d) The unpaid amount per share on forfeited shares
Answer: (c) The amount received per share on forfeited shares.

Question. Assertion : Issued capital is that part of Authorised Share Capital which is issued for subscription whether subscribe or not.
Reason : Issued capital is that part of Authorised Share Capital which is issued for subscription to the public which can be more than the subscription or equal to the subscription.
(a) Both A and R true and R is the correct explanation of A.
(b) Both A and R are true but R is not the correct explanation of A
(c) A is true and R is false
(d) A is false and R is true
Answer: (a) Both A and R true and R is the correct explanation of A.

Question. Assertion : Issued capital can never be more than the Authorised capital.
Reason : When-ever the company wants it can issue shares to the public so it does not matter what the Authorised Capital is.
(a) Both A and R true and R is the correct explanation of A.
(b) Both A and R are true but R is not the correct explanation of A
(c) A is true and R is false
(d) A is false and R is true
Answer: (c) A is true and R is false

Question. Assertion : Issued capital can never be more than the Authorised Capital.
Reason : Authorised Capital is the maximum amount of capital that the company can issue during its life time so issued capital can never exceed than the Authorised capital.
(a) Both A and R true and R is the correct explanation of A.
(b) Both A and R are true but R is not the correct explanation of A
(c) A is true and R is false
(d) A is false and R is true
Answer: (d) A is false and R is true

Question. Assertion : Shares can be issued to the Public at the discount.
Reason : Shares can be issued to the Public at a discount on reissue of the forfeited shares.
(a) Both A and R true and R is the correct explanation of A.
(b) Both A and R are true but R is not the correct explanation of A
(c) A is true and R is false
(d) A is false and R is true
Answer: (b) Both A and R are true but R is not the correct explanation of A

Question. Assertion : Shares can’t be issued to the Public the discount.
Reason : Section 53 of the Companies Act, 2013 does not allow issue of shares at discount, However, section 54 allows issue of shares at a discount, when they are issued as Sweat Equity Shares.
(a) Both A and R true and R is the correct explanation of A.
(b) Both A and R are true but R is not the correct explanation of A
(c) A is true and R is false
(d) A is false and R is true
Answer: (a) Both A and R true and R is the correct explanation of A.

Question. Assertion : Forfeited Shares can be re-issued at any amount of discount that the company is in favour to issue.
Reason : Forfeited shares can be re-issued at the discount up to the maximum of the amount already credited to the Share Forfeiture Account.
(a) Both A and R true and R is the correct explanation of A.
(b) Both A and R are true but R is not the correct explanation of A
(c) A is true and R is false
(d) A is false and R is true
Answer: (d) A is false and R is true

Question. Assertion : The Application money received in excess of the allotment money is always transferred to Calls-in advance account.
Reason : The Application money received in excess of the allotment money is to be adjusted depending on the terms that the company is giving Pro-rata allotment and wishes to adjust the money on call’s or not if the company is not willing to adjust the money it can be refunded.
(a) Both A and R true and R is the correct explanation of A.
(b) Both A and R are true but R is not the correct explanation of A
(c) A is true and R is false
(d) A is false and R is true
Answer: (d) A is false and R is true

Question. Assertion : Security Premium Reserve can be collected at any point of time, like on Application, Allotment or at any call.
Reason : Security premium reserve can be collected at any point of time but if it is not mentioned when to be collected it is presumed to be collected at the time of Allotment
(a) Both A and R true and R is the correct explanation of A.
(b) Both A and R are true but R is not the correct explanation of A
(c) A is true and R is false
(d) A is false and R is true
Answer: (a) Both A and R true and R is the correct explanation of A.

Question. Assertion : Cumulative Preference Shares mean that arrears of dividend is payable before dividend is paid on Equity Shares.
Reason : Cumulative Preference Shares carry the right to receive arrears of dividend before the dividend is paid to the Equity Shareholders.
(a) Both A and R true and R is the correct explanation of A.
(b) Both A and R are true but R is not the correct explanation of A
(c) A is true and R is false
(d) A is false and R is true
Answer: (a) Both A and R true and R is the correct explanation of A.

Question. Assertion : Pro-rata allotment is made in the event the shares are Undersubscribed.
Reason : Pro-rata allotment is made in the case of the over subscription as the subscription is received for the amount which is more than the issued capital.
(a) Both A and R true and R is the correct explanation of A.
(b) Both A and R are true but R is not the correct explanation of A
(c) A is true and R is false
(d) A is false and R is true
Answer: (d) A is false and R is true

X Ltd. is a reputed company invited applications for 20000 shares of Rs. 10 each payable as under: Rs. 3 per share on Application ; Rs. 3 per on Allotment; Rs. 2 per share on First Call; and balance on Final Call. Prakriti an applicant of 100 shares failed to pay allotment money and first call money due from him. Rest of money is duely received.

Question. What will be the amount received on share Allotment?
(a) Rs. 59,700
(b) Rs. 59,800
(c) Rs. 59,600
(d) Rs. 59,500
Answer: (a) Rs. 59,700

Question. What will be the total amount(including Allotment and First call) of Calls in arrear?
(a) 500
(b) 700
(c) 600
(d) 800
Answer: (a) 500

Question. What will be the amount due on Final Call ?
(a) Rs. 39,700
(b) Rs. 39,800
(c) Rs. 39,900
(d) Rs. 40,000
Answer: (d) Rs. 40,000

Pawan Ltd. issued Rs. 10,00,000 new capital divided into Rs. 100 shares at a premium of Rs. 20 per share, payable as under:
On Application Rs. 10
On Allotment Rs. 40 (including premium of Rs. 10 per share)
On First Call and Final Balance
Over – payments on application were to be applied towards sums due on allotment and first and final call. Where no allotment was made, money was to be refunded in full. The issue was oversubscribed to the extent of 13000 shares. Applications for 12000 shares were allotted only 2000 shares and applications for 3000 were sent letters of regret and application money was returned to them, rest were alleted in full. All the money due was duly received.

Question. What will the amount due on share Application.
(a) Rs. 1,00,000
(b) Rs. 1,30,000
(c) Rs. 2,00,000
(d) Rs. 1,80,000
Answer: (a) Rs. 1,00,000

Question. What amount of money will be credit to bank ( returned)?
(a) Rs. 30,000
(b) Rs. 50,000
(c) Rs. 1,00,000
(d) Rs. 1,10,000
Answer: (a) Rs. 30,000

Question. What will the amount received on share First and Final Call?
(a) Rs. 6,20,000
(b) Rs. 6,80,000
(c) Rs. 6,60,000
(d) Rs. 6,40,000
Answer: (b) Rs. 6,80,000

A Ltd company was registered with an authorized capital of Rs. 2,00,000 in Rs. 10 in shares, of these 6000 shares were issued as fully paid to the vendors for the purchase of buildings. 8,000 shares were subscribed for by the public and during the first year Rs. 6 per share were called up, payable Rs. 3 on Application, Rs. 1 on Allotment, Rs. 1 on First Call, and Rs. 1 on Final Call. The amounts received in respect of these shares were as follows :
On 6000 shares the full amount called.
On 1200 shares Rs. 5 per share
On 500 shares Rs. 4 per share
On 300 shares Rs. 3 per share
The directors forfeited 800 shares on which less than Rs. 5 per share had been paid.

Question. What will the amount due on share application.
(a) Rs. 24,000
(b) Rs. 25,000
(c) Rs. 80,000
(d) Rs. 84,000
Answer: (a) Rs. 24,000

Question. What will be the total arrear amount (including first and final call) of the share forfeited?
(a) Rs. 1,900
(b) Rs. 2,900
(c) Rs. 4,800
(d) Rs. 2,200
Answer: (a) Rs. 1,900

Question. What will the amount of share forfeiture?
(a) Rs. 1,900
(b) Rs. 2,900
(c) Rs. 4,800
(d) Rs. 2,200
Answer: (b) Rs. 2,900

A Ltd. makes an issue of 10000 equity shares of Rs. 100 each, payable as follows:
On Application and Allotment Rs. 50
On First call Rs. 25
On Final call Rs. 25
Members holding 400 shares did not pay the second call and the shares are duly forfeited, 300 of which are re issued as fully paid at Rs. 80 per share.

Question. What will be the amount due on share application and allotment?
(a) Rs. 5,00,000
(b) Rs. 2,50,000
(c) Rs. 7,50,000
(d) Rs. 4,50,000
Answer: (a) Rs. 5,00,000

Question. What will be the amount transferred to Capital Reserve?
(a) Rs. 16,500
(b) Rs. 17,000
(c) Rs. 30,000
(d) Rs. 24,000
Answer: (a) Rs. 16,500

Question. What amount will be debited in Share Forfeiture Account.
(a) Rs. 6,000
(b) Rs. 24,000
(c) Rs. 30,000
(d) Rs. 10,000
Answer: (a) Rs. 6,000