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Space Ventures… (Class 12 Accountancy SQP 2025-26, Q26a)

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AccountancyCBSE Class 12 · Sample paper, session 2025-26 · 6 marks · Long answer

CBSE Class 12 Accountancy sample paper 2025-26: question 26(a)

From the official CBSE sample question paper for 2025-26, section A, question 26(a), for 6 marks. Try it first; the hints and our step-by-step solution are below.

Q26(a) · 6 marks · Long answerAccounting for Share Capital

Space Ventures Limited was registered with an authorised capital of ₹ 20,00,000 divided into 2,00,000 shares of ₹ 10 each. The company offered 80,000 shares for public subscription payable ₹ 4 on application and ₹ 7 on allotment (including ₹ 1 premium). Public had applied for 1,10,000 shares and pro-rata allotment was made in the ratio of 5:4. Remaining applications were rejected. Mukta, holding 6,000 shares failed to pay allotment money. Her shares were being forfeited and later re-issued 4,000 shares at a discount of ₹ 2 per share.
Pass necessary entries in the books of Space Ventures Ltd.

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

Find how many shares Mukta applied for under the 5 : 4 pro-rata.

Hint 2

Her excess application money reduces what she owed on allotment.

Hint 3

On forfeiture, cancel the unpaid premium as well as the called-up capital.

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. Applicants for 1,00,000 shares get 80,000 (5 : 4); 10,000 applications are rejected. Excess application money of ₹ 80,000 is kept for allotment. Mukta, holding 6,000 shares, had applied for 7,500 and paid ₹ 30,000; ₹ 6,000 of it went towards allotment, so she owes ₹ 42,000 − 6,000 = ₹ 36,000 on allotment.

  2. ParticularsDr. (₹)Cr. (₹)
    Bank A/c Dr.4,40,000
    To Share Application A/c4,40,000
    (Being application money received on 1,10,000 shares)
    ½ mark
  3. ParticularsDr. (₹)Cr. (₹)
    Share Application A/c Dr.4,40,000
    To Share Capital A/c3,20,000
    To Share Allotment A/c80,000
    To Bank A/c40,000
    (Being application money adjusted and refunded)
    1 mark
  4. ParticularsDr. (₹)Cr. (₹)
    Share Allotment A/c Dr.5,60,000
    To Share Capital A/c4,80,000
    To Securities Premium A/c80,000
    (Being allotment money due)
    ½ mark
  5. ParticularsDr. (₹)Cr. (₹)
    Bank A/c Dr.4,44,000
    Calls in Arrears A/c Dr.36,000
    To Share Allotment A/c4,80,000
    (Being allotment money received except from Mukta)
    1 mark
  6. ParticularsDr. (₹)Cr. (₹)
    Share Capital A/c Dr.60,000
    Securities Premium A/c Dr.6,000
    To Share Forfeited A/c30,000
    To Calls in Arrears A/c36,000
    (Being Mukta's 6,000 shares forfeited)
    1½ marks
  7. ParticularsDr. (₹)Cr. (₹)
    Bank A/c Dr.32,000
    Share Forfeited A/c Dr.8,000
    To Share Capital A/c40,000
    (Being 4,000 shares reissued at ₹ 8 as fully paid)
    Share Forfeited A/c Dr.12,000
    To Capital Reserve A/c12,000
    (Being gain on reissue of 4,000 shares transferred: 20,000 − 8,000)
    1½ marks

Answer: Application ₹ 4,40,000 (refund ₹ 40,000, ₹ 80,000 to allotment); allotment due ₹ 5,60,000, received ₹ 4,44,000, arrears ₹ 36,000; forfeiture: Capital ₹ 60,000 + Premium ₹ 6,000 to Forfeited ₹ 30,000 and Calls in Arrears ₹ 36,000; reissue Bank ₹ 32,000 + Forfeited ₹ 8,000; Capital Reserve ₹ 12,000

Where the marks are

  • Application and adjustment entries (1½ marks)
  • Allotment due and received with calls in arrears (1½ marks)
  • Forfeiture entry (1½ marks)
  • Reissue and Capital Reserve (1½ marks)

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.