Skip to content

Generic Pharma Ltd… (Class 12 Accountancy 2026, Q24a)

questionbuddy.in/q/cbse-12-accountancy-2026-67-1-1-q24a-generic-pharma-ltd-invited-applications

AccountancyCBSE Class 12 · Board exam 2026, set 67/1/1 · 6 marks · Long answer

CBSE Class 12 Accountancy 2026: question 24(a)

Set in the CBSE Class 12 board exam of 2026, paper 67/1/1, section A, question 24(a), for 6 marks. Try it first; the hints and our step-by-step solution are below.

Q24(a) · 6 marks · Long answerAccounting for Share Capital

Generic Pharma Ltd. invited applications for using 3,00,000 equity shares of ₹ 10 each at a premium of ₹ 6 per share. The amount was payable as follows :

on Application and Allotment – ₹ 4 per share (including premium of ₹ 2 per share)

on First and Final Call – Balance

Applications for 4,00,000 shares were received. Applications for 40,000 shares were rejected and the application money was refunded. Shares were allotted on pro-rata basis to the remaining applicants. Excess money received on applications was adjusted towards sums due on first and final call. Jain, an applicant for 3,600 shares failed to pay the first and final call. His shares were forfeited.

Pass necessary journal entries in the books of Generic Pharma Ltd. for the above transactions. Open 'calls in arrears account' and 'calls in advance account', wherever necessary.

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

Split each payment into capital and premium.

Hint 2

Jain applied for 3,600 shares but got 3,000.

Hint 3

His excess application money reduces what he owed on the call.

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 and allotment ₹ 2 capital + ₹ 2 premium; call ₹ 8 capital + ₹ 4 premium. 3,60,000 applicants get 3,00,000 shares (6 : 5); excess 60,000 × 4 = ₹ 2,40,000 held as calls in advance. Jain (3,600 applied, 3,000 allotted) had ₹ 2,400 in advance, so his arrears = 3,000 × 12 − 2,400 = ₹ 33,600.

  2. ParticularsDr. (₹)Cr. (₹)
    Bank A/c Dr.16,00,000
    To Equity Share Application and Allotment A/c16,00,000
    (Being application money received on 4,00,000 shares at ₹ 4)
    1 mark
  3. ParticularsDr. (₹)Cr. (₹)
    Equity Share Application and Allotment A/c Dr.16,00,000
    To Equity Share Capital A/c6,00,000
    To Securities Premium A/c6,00,000
    To Calls in Advance A/c2,40,000
    To Bank A/c1,60,000
    (Being application money adjusted, excess held and rejected money refunded)
    1½ marks
  4. ParticularsDr. (₹)Cr. (₹)
    Equity Share First and Final Call A/c Dr.36,00,000
    To Equity Share Capital A/c24,00,000
    To Securities Premium A/c12,00,000
    (Being call money due)
    1 mark
  5. ParticularsDr. (₹)Cr. (₹)
    Bank A/c Dr.33,26,400
    Calls in Arrears A/c Dr.33,600
    Calls in Advance A/c Dr.2,40,000
    To Equity Share First and Final Call A/c36,00,000
    (Being call money received except from Jain)
    1 mark

  6. Forfeiture: capital called ₹ 10 × 3,000 and unpaid premium ₹ 4 × 3,000 are cancelled; Jain had paid 3,000 × 2 + 2,400 = ₹ 8,400 towards capital.

    ParticularsDr. (₹)Cr. (₹)
    Equity Share Capital A/c Dr.30,000
    Securities Premium A/c Dr.12,000
    To Share Forfeiture A/c8,400
    To Calls in Arrears A/c33,600
    (Being Jain's 3,000 shares forfeited)
    1½ marks

Answer: Application ₹ 16,00,000 (capital ₹ 6,00,000, premium ₹ 6,00,000, advance ₹ 2,40,000, refund ₹ 1,60,000); call ₹ 36,00,000, Bank ₹ 33,26,400, arrears ₹ 33,600; forfeiture to Share Forfeiture ₹ 8,400

Where the marks are

  • Money received (1 mark)
  • Application adjustment (1½ marks)
  • Call due (1 mark)
  • Call received (1 mark)
  • Forfeiture (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 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.