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Lilly Ltd… (Class 12 Accountancy SQP 2023-24, Q19b)

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AccountancyCBSE Class 12 · Sample paper, session 2023-24 · 3 marks · Short answer

CBSE Class 12 Accountancy sample paper 2023-24: question 19(b)

From the official CBSE sample question paper for 2023-24, section A, question 19(b), for 3 marks. Try it first; the hints and our step-by-step solution are below.

Q19(b) · 3 marks · Short answerAccounting for Share Capital

Lilly Ltd. forfeited 100 shares of ₹10 each issued at 10% premium (₹8 called up) on which a shareholder did not pay ₹3 of allotment (including premium) and first call of ₹2. Out of these 60 shares were reissued to Ram as fully paid for ₹8 per share and 20 shares to Suraj as fully paid up @ ₹12 per share at different intervals of time.

Prepare Share Forfeiture account.

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2023-24.

Hints

Open one hint at a time and try again before the next.

Hint 1

Premium not received is not forfeited; only the capital received is.

Hint 2

Reissue "as fully paid" means as ₹ 10 shares.

Hint 3

Each reissue moves its own gain to Capital Reserve.

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. Per share ₹ 8 was called. Unpaid: allotment ₹ 3 (₹ 2 capital + ₹ 1 premium) and first call ₹ 2. Capital received = ₹ 8 − ₹ 4 = ₹ 4, so ₹ 400 is forfeited on 100 shares.

    1 mark

  2. Ram's 60 shares are reissued as fully paid ₹ 10 shares for ₹ 8: discount ₹ 2 each (₹ 120) is met from forfeiture; the rest of their forfeited ₹ 240, i.e. ₹ 120, goes to Capital Reserve. Suraj's 20 shares at ₹ 12 need no discount, so all ₹ 80 forfeited on them goes to Capital Reserve. ₹ 80 on the 20 shares not reissued is carried down.

    1 mark

  3. Share Forfeiture Account

    Particulars₹Particulars₹
    To Share Capital A/c (discount to Ram)120By Share Capital A/c400
    To Capital Reserve A/c (Ram's shares)120
    To Capital Reserve A/c (Suraj's shares)80
    To Balance c/d80
    400400
    1 mark

Answer: Share Forfeiture A/c: credited ₹ 400; debited ₹ 120 (discount to Ram), ₹ 120 and ₹ 80 to Capital Reserve, balance c/d ₹ 80

Where the marks are

  • Forfeited amount ₹ 400 (1 mark)
  • Discount and capital reserve on Ram's shares (1 mark)
  • Capital reserve on Suraj's shares and balance ₹ 80 (1 mark)

Revise the chapter

Practise this chapterBoard-style questions from Accounting for Share Capital, one at a time, marked against the answer key and marking points.Back to the full paperSample paper 2023-24: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.