{"id":20069,"date":"2021-03-12T11:55:35","date_gmt":"2021-03-12T06:25:35","guid":{"rendered":"https:\/\/mcq-questions.com\/?p=20069"},"modified":"2022-03-02T10:48:33","modified_gmt":"2022-03-02T05:18:33","slug":"ncert-solutions-for-class-12-accountancy-chapter-6","status":"publish","type":"post","link":"https:\/\/mcq-questions.com\/ncert-solutions-for-class-12-accountancy-chapter-6\/","title":{"rendered":"NCERT Solutions for Class 12 Accountancy Chapter 6 Accounting for Share Capital"},"content":{"rendered":"

Detailed, Step-by-Step NCERT Solutions for 12 Accountancy<\/a> Chapter 6\u00a0Accounting for Share Capital Questions and Answers were solved by Expert Teachers as per NCERT (CBSE) Book guidelines covering each topic in chapter to ensure complete preparation.<\/p>\n

Accounting for Share Capital NCERT Solutions for Class 12 Accountancy Chapter 6<\/h2>\n

Accounting for Share Capital Questions and Answers <\/span>Class 12 Accountancy Chapter 6<\/h3>\n

Test your Understanding-I (Page No. 7)<\/span><\/p>\n

State which of the following statements are true:
\n(a) A Company is formed according to the provisions of Indian Companies Act-1932.
\nAnswer:
\nFalse<\/p>\n

(b) A company is an artificial person.
\nAnswer:
\nTrue<\/p>\n

(c) Shareholders of a company are liable for the acts of the company.
\nAnswer:
\nFalse<\/p>\n

\"NCERT<\/p>\n

(d) Every member of a company is entitled to take part in its management.
\nAnswer:
\nTrue<\/p>\n

(e) Company’s shares are generally transferable.
\nAnswer:
\nTrue<\/p>\n

(f) Share application account is a personal account.
\nAnswer:
\nTrue<\/p>\n

(g) The director of a company must be a shareholder.
\nAnswer:
\nTrue<\/p>\n

(h) Application money should not be less than 25% of the face value of shares.
\nAnswer:
\nTrue<\/p>\n

(i) Paid-up capital can exceed called-up capital.
\nAnswer:
\nFalse<\/p>\n

\"NCERT<\/p>\n

(j) Capital reserves are created from capital profits.
\nAnswer:
\nTrue<\/p>\n

(k) Securities premium account is shown on the assets side of the balance sheet.
\nAnswer:
\nTrue<\/p>\n

(l) Premium on issue of shares is a capital loss.
\nAnswer:
\nTrue<\/p>\n

(m) At the time of issue of shares, the maximum rate of securities premium is 10%.
\nAnswer:
\nFalse<\/p>\n

(n) The part of capital which is called-up only on winding up is called reserve capital.
\nAnswer:
\nTrue<\/p>\n

(o) Forfeited shares can not be issued at a discount.
\nAnswer:
\nFalse<\/p>\n

\"NCERT<\/p>\n

(p) The shares originally issued at discount may be re-issued at a premium.
\nAnswer:
\nTrue<\/p>\n

Test your Understanding-II (Page No. 36)<\/span><\/p>\n

Choose the Correct Answer.
\n(a) Equity share holders are :
\n(i) creditors
\n(ii) owners
\n(iii) customers of the company.
\nAnswer:
\n(ii) Owners<\/p>\n

(b) Nominal share capital is :
\n(i) that Part of the authorised capital which is issued by the company.
\n(ii) the amount of capital which is actually applied for by the prospective shareholders.
\n(iii) the maximum amount of share capital which a company is authorised to issue.
\n(iv) the amount actually paid by the shareholders.
\nAnswer:
\n(iii) the maximum amount 01 share capital which a company is authorised to issue.<\/p>\n

(c) Interest on calls-in-arrears is charged according to “Table A” at:
\n(i) 5%
\n(ii) 6%
\n(iii) 8%
\n(iv) 11%
\nAnswer:
\n(ii) 5%<\/p>\n

\"NCERT<\/p>\n

(d) Money received in advance from shareholders before it is actually called-up by the directors is :
\n(i) debited to calls-in-advance account
\n(ii) credited to calls-in-advance account
\n(iii) debited to calls account.
\nAnswer:
\n(ii) Credited to calls-in-advance account<\/p>\n

(e) Shares can be forfeited :
\n(i) for non-payment of call money
\n(ii) for failure to attend meetings
\n(iii) for failure to repay the loan to the bank
\n(iv) for which shares are pledged as a security.
\nAnswer:
\n(i) for non-payment of call money<\/p>\n

(f) The balance of share forfeited account after the reissue of forfeited shares is transferred to :
\n(i) general reserve
\n(ii) capital redemption reserve
\n(iii) capital reserve
\n(iv) reveneue reserve
\nAnswer:
\n(iii) capital reserve<\/p>\n

(g) Balance of share forfeiture account is shown in the balance sheet under the item :
\n(i) current liabilities and provisions
\n(ii) reserves and surpluses
\n(iii) share capital account
\n(iv) unsecured loans
\nAnswer:
\n(iii) share capital account<\/p>\n

Test your Understanding – III (Page No. 59)<\/span><\/p>\n

(a) If a Share of Rs. 10 on which Rs. 8 is called-up and Rs. 6 is paid is forfeited. State with what amount the Share Capital account will be debited.<\/p>\n

(b) If a Share of Rs. 10 on which Rs. 6 has been paid is forfeited, at what minimum price it can be reissued.<\/p>\n

(c) Allhuwalia Ltd. issued 1,000 equity shares of Rs. 100 each as fully paid-up in consideration of the purchase of plant and machinery worth Rs. 1,00,000. What entry will be recorded in company\u2019s journal.
\nAnswer:
\n(a) Rs. 8
\n(b) Rs. 4
\n(c) …….<\/p>\n

\"NCERT<\/p>\n

On January 1,2006, a Limited Company was incorporated with an authorised capital of Rs. 40,000 divided into shares of Rs. 10 each.<\/p>\n

\"NCERT<\/p>\n

It offered to the public for subscription of 3,000 shares payable as follows :<\/p>\n

On Application – Rs. 3 per share
\nOn Allotment – Rs. 2 per share
\nOn First Call (One month after allotment) – Rs. 2.50 per share
\nOn Second and Final Call – Rs. 2.50 per share<\/p>\n

The shares were fully subscribed for by the public and application money duly received on January 15, 2006, The directors made the allotment on February 1,2006.
\nHow will you record the share capital transactions in the books of a company if :
\n(i) The amount due has been duly received.
\n(ii) The company maintains the combined account for application and allotment.
\nAnswer:
\n\"NCERT
\n\"NCERT
\n\"NCERT
\n\"NCERT<\/p>\n

Do It Yourself (Page No. 22)<\/span><\/p>\n

Question 1.
\nA company issued 20,000 equity shares of Rs. 10\/- each payable at Rs. 3 on application, Rs. 3 on allotment, Rs. 2 on first call and Rs. 2 on second and the final call. The allotment money was payable on or before May 1st, 2005; first call money on or before August 1st, 2005; and the second and final call on or before October 1st, 2005; ‘X’, whom 1,000 shares were allotted, did not pay the allotment and call money; ‘Y’ on allottee of 600 shares did not pay the two calls; and ‘Z’, whom 400 shares were allotted, did not pay the final call. Pass journal entries and prepare the Balance Sheet of the company as on December 31st, 2005.
\nAnswer:
\n\"NCERT
\n\"NCERT<\/p>\n

\"NCERT
\n\"NCERT<\/p>\n

\"NCERT
\n\"NCERT<\/p>\n

Question 2.
\nAlfa company Ltd. issued 10,000 shares of Rs. 10 each for cash payable at Rs. 3 on application, Rs. 2 on allotment and the balance in two equal installments. The allotment money was payable on or before March 3rd, 2006; the first call money on or before 30th June, 2006; and the final call money on or before 31st August, 2006. Mr. ‘A’, whom 600 shares were allotted, paid the entire remaining face value of shares alloted to him on allotment. Record journal entries in companies’ books and also prepare their Balance Sheet on the date.
\nAnswer:
\n\"NCERT
\n\"NCERT<\/p>\n

\"NCERT<\/p>\n

\"NCERT<\/p>\n

\"NCERT<\/p>\n

Do It yourself (Page No. 46)\u00a0<\/span><\/p>\n

Question 1.
\nA company forfeited 100 equity shares of Rs. 10 each issued at a premium of 20% for non-payment of final call of Rs. 5 including the premium. Show the journal entry to be passed for forfeiture of Shares.
\nAnswer:
\n\"NCERT<\/p>\n

Question 2.
\nA company forfeited 800 equity shares of Rs. 10 each issued at a discount of 10% for non-payment of two calls of Rs. 2 each. Calculate the amount forfeited by the company. Also calculate the amount of capital profit if 300 shares were reissued out of the forfeited shares at Rs. 8 per share. Also show how to pass the journal entries.
\nAnswer:
\n\"NCERT
\n\"NCERT<\/p>\n

\"NCERT<\/p>\n

Do it Yourself (Page No. 59)<\/span><\/p>\n

Excell Company Limited made an issue of 1,00,000 Equity Shares of Rs. 10 each, payable as follows:<\/p>\n

On Application – Rs. 2.50 per share
\nOn Allotment – Rs. 2.50 per share
\nOn 1st and Final call – Rs. 5.00 per share<\/p>\n

X, the holder of 400 shares did not pay the call money and his shares were forfeited. Two hundred of the forfeited shares were reissued as fully paid at Rs. 8 per share. Draft necessary journal entries and prepare Share Capital and Share Forfeited’ accounts in the books of the company.
\nAnswer:
\n\"NCERT
\n\"NCERT<\/p>\n

\"NCERT<\/p>\n

\"NCERT
\n\"NCERT<\/p>\n

Do it Yourself (Page No. 62)<\/span><\/p>\n

Journalise the following:
\n(a) The directors of a company forfeited 200 equity shares of Rs. 10 each on which Rs. 800 had been paid. The Shares were reissued upon payment of Rs. 1,500.
\n\"NCERT<\/p>\n

(b) A holds 100 shares of Rs. 10 each on which he has paid Re. 1 per share on application. B holds 200 Shares of Rs. 10 each on which he has paid Re. 1 on application Rs. 2 on allotment. C holds 300 shares of Rs. 10 each who has paid Re. 1 on applications. Rs. 2 on allotment and Rs. 3 on first call. They all failed to pay their arrears and second call of Rs. 4 per share as well. All the shares of A, B and C were forfieted and subsequently reissued at Rs. 11 per share as fully Paid- up.
\nAnswer :
\n\"NCERT<\/p>\n

\"NCERT
\n\"NCERT\"NCERT<\/p>\n

Short Answer Type Questions<\/span><\/p>\n

Question 1.
\nWhat is Public Company?
\nAnswer:
\nPublic Company\u2014According to Section 3(i) (iv) of the Companies Act 1956 “Public Company means a company
\n(a) which is not a private company and
\n(b) has a minimum paid up capital of Rs. 5 lakhs or such higher paid-up capital and
\n(c) is a private company which is a subsidiary of a company which is not a private company.” Companies Amendment Act 2000 states that a public company cannot be registered with a capital of less than Rs. 5 lakhs.<\/p>\n

A public company may be a listed company or unlisted company. A listed company is a public company which has any of its securities listed in any recognised stock exchange. An unlisted company is one whose securities are not listed on any recognised stock exchange for trading.<\/p>\n

\"NCERT<\/p>\n

Question 2.
\nWhat is Private Limited Company?
\nAnswer:
\nPrivate Company\u2014According to section (3)(i), (iii), a private company means a company which has a minimum paid up capital of Rs. One lakh or such higher paid-up capital as may be prescribed and by its articles\u2014
\n(i) Restricts the rights of members to transfer its shares,
\n(ii) Limits the number of its members to 50 excluding :<\/p>\n