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Sapphire Ltd. Was… (Class 12 Accountancy SQP 2025-26, Q21)

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AccountancyCBSE Class 12 · Sample paper, session 2025-26 · 4 marks · Long answer

CBSE Class 12 Accountancy sample paper 2025-26: question 21

From the official CBSE sample question paper for 2025-26, section A, question 21, for 4 marks. Try it first; the hints and our step-by-step solution are below.

Q21 · 4 marks · Long answerAccounting for Share Capital

Sapphire Ltd. Was registered with an authorised capital of ₹ 80,00,000 divided into 4,00,000 shares of ₹ 20 each. Company offered and issued 1,50,000 shares at a premium of ₹ 4 per share payable as ₹ 7 on application (including ₹ 1 premium), ₹ 12 on allotment (including ₹ 2 premium) and balance on first call. Rancho, holding 10,000 shares failed to pay allotment and call money. Another shareholder Sultan holding 5,000 shares failed to pay the call money. All the shares held by Rancho were forfeited and of these 8,000 were reissued at ₹ 22 per share as fully paid.
Show Share Capital sub head as it would in the Balance Sheet of Sapphire ltd. along with notes to Account as per the Companies Act 2013.

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2025-26.

Hints

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

Hint 1

Split each instalment into its capital and premium parts.

Hint 2

After reissue, 1,50,000 − 10,000 + 8,000 = 1,48,000 shares are in issue; 5,000 of them are not fully paid.

Hint 3

Only the forfeited amount on shares not yet reissued stays in Share Forfeiture A/c.

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. Working. Per share: application ₹ 6 capital + ₹ 1 premium; allotment ₹ 10 capital + ₹ 2 premium; call ₹ 4 capital + ₹ 1 premium. Rancho (10,000 shares) paid only application money, so ₹ 6 × 10,000 = ₹ 60,000 is forfeited. 8,000 shares are reissued at ₹ 22 (no discount), so the forfeiture on them (₹ 48,000) goes to Capital Reserve; ₹ 12,000 stays in Share Forfeiture A/c for 2,000 shares. Sultan's 5,000 shares have the call of ₹ 4 per share (capital) unpaid: calls in arrears ₹ 20,000.

    1 mark

  2. Balance Sheet of Sapphire Ltd. (extract)

    ParticularsNote No.Current Year (₹)
    I. Equity and Liabilities
    1. Shareholders' Funds
    (a) Share Capital129,52,000
    1 mark

  3. Note 1: Share Capital

    Particulars₹
    Authorised Capital: 4,00,000 equity shares of ₹ 20 each80,00,000
    Issued Capital: 1,50,000 equity shares of ₹ 20 each30,00,000
    Subscribed and fully paid up: 1,43,000 equity shares of ₹ 20 each28,60,000
    Subscribed but not fully paid up: 5,000 equity shares of ₹ 20 each, ₹ 20 called up (1,00,000) less calls in arrears (20,000)80,000
    Add: Share Forfeiture A/c12,000
    Total29,52,000
    2 marks

Answer: Share Capital ₹ 29,52,000 (fully paid 1,43,000 shares ₹ 28,60,000; 5,000 shares ₹ 1,00,000 less calls in arrears ₹ 20,000; Share Forfeiture ₹ 12,000)

Where the marks are

  • Balance Sheet extract showing Share Capital ₹ 29,52,000 (1 mark)
  • Authorised and issued capital (1 mark)
  • Subscribed fully paid and not fully paid with calls in arrears (1 mark)
  • Share Forfeiture ₹ 12,000 added (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 2025-26: 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.