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Raunak Cotton Ltd… (Class 12 Accountancy 2026, Q19a)

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AccountancyCBSE Class 12 · Board exam 2026, set 67/1/1 · 3 marks · Short answer

CBSE Class 12 Accountancy 2026: question 19(a)

Set in the CBSE Class 12 board exam of 2026, paper 67/1/1, section A, question 19(a), for 3 marks. Try it first; the hints and our step-by-step solution are below.

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

Raunak Cotton Ltd. purchased machinery of ₹ 6,80,000 from Heavy Machines Ltd. The Payment to Heavy Machines Ltd. was made by issuing 10,500 equity shares of ₹ 50 each at a premium of 20% and the balance through a cheque.

Pass necessary journal entries for the above transactions in the books of Raunak Cotton Ltd.

Source: official question paper from cbse.gov.in (PDF). See it in the full 2026 board paper, set 67/1/1.

Hints

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

Hint 1

A 20% premium on ₹ 50 makes the issue price ₹ 60.

Hint 2

The cheque covers whatever the shares do not.

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. Shares: 10,500 × ₹ 60 (₹ 50 + 20% premium) = ₹ 6,30,000 (capital ₹ 5,25,000, premium ₹ 1,05,000). Balance by cheque = 6,80,000 − 6,30,000 = ₹ 50,000.

  2. ParticularsDr. (₹)Cr. (₹)
    Machinery A/c Dr.6,80,000
    To Heavy Machines Ltd.6,80,000
    (Being machinery purchased)
    1 mark
  3. ParticularsDr. (₹)Cr. (₹)
    Heavy Machines Ltd. Dr.6,80,000
    To Equity Share Capital A/c5,25,000
    To Securities Premium A/c1,05,000
    To Bank A/c50,000
    (Being vendor paid by 10,500 shares at 20% premium and a cheque)

    The payment can also be split into two entries: shares ₹ 6,30,000 and cheque ₹ 50,000.

    2 marks

Answer: Machinery Dr. ₹ 6,80,000 to Heavy Machines Ltd.; Heavy Machines Ltd. Dr. ₹ 6,80,000 to Share Capital ₹ 5,25,000, Securities Premium ₹ 1,05,000, Bank ₹ 50,000

Where the marks are

  • Purchase entry (1 mark)
  • Payment by shares at premium and cheque (2 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 paper2026 board paper, set 67/1/1: 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.