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Pass necessary journal… (Class 12 Accountancy 2026, Q24b)

questionbuddy.in/q/cbse-12-accountancy-2026-67-1-1-q24b-pass-necessary-journal-entries-forfeiture

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

CBSE Class 12 Accountancy 2026: question 24(b)

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

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

Pass necessary journal entries for forfeiture and reissue of forfeited shares in the following cases :

  1. (i)

    Diksha Ltd. forfeited 3,000 shares of ₹ 10 each for non-payment of final call of ₹ 2 per share. Out of these, 600 shares were reissued as fully paid up in such a way that ₹ 4,200 was transferred to capital reserve.

    3 marks
  2. (ii)

    Ashoka Ltd. forfeited 2,000 equity shares of ₹ 100 each issued at a premium of 10% for non-payment of allotment money of ₹ 60 per share (including premium). The first and final call of ₹ 20 per share was not yet made. The forfeited shares were re-issued at ₹ 70 per share fully paid up.

    3 marks

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

Work back from the ₹ 4,200 capital reserve to find the reissue discount.

Hint 2

In (ii), unpaid premium on allotment must be cancelled too.

Hint 3

If the discount equals the forfeited amount, nothing is left for 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. (i) Diksha Ltd. Paid ₹ 8 per share: forfeiture = 3,000 × 8 = ₹ 24,000.

    ParticularsDr. (₹)Cr. (₹)
    Share Capital A/c Dr.30,000
    To Share Forfeiture A/c24,000
    To Share Final Call A/c6,000
    (Being 3,000 shares forfeited)
    1 mark

  2. Forfeited amount on 600 shares = ₹ 4,800. Since ₹ 4,200 goes to capital reserve, the discount was ₹ 600 (₹ 1 per share), i.e. reissue at ₹ 9.

    ParticularsDr. (₹)Cr. (₹)
    Bank A/c Dr.5,400
    Share Forfeiture A/c Dr.600
    To Share Capital A/c6,000
    (Being 600 shares reissued at ₹ 9 as fully paid)
    1 mark
  3. ParticularsDr. (₹)Cr. (₹)
    Share Forfeiture A/c Dr.4,200
    To Capital Reserve A/c4,200
    (Being gain on reissued shares transferred)
    1 mark

  4. (ii) Ashoka Ltd. Called up ₹ 80 per share (capital); allotment ₹ 60 included ₹ 10 premium. Only the application money (₹ 30 capital) was paid: forfeiture ₹ 60,000.

    ParticularsDr. (₹)Cr. (₹)
    Equity Share Capital A/c Dr.1,60,000
    Securities Premium A/c Dr.20,000
    To Share Forfeiture A/c60,000
    To Equity Share Allotment A/c1,20,000
    (Being 2,000 shares forfeited for non-payment of allotment)
    1½ marks

  5. Reissue at ₹ 70 fully paid: discount ₹ 30 per share = ₹ 60,000, which uses up the whole forfeited amount, so nothing goes to capital reserve.

    ParticularsDr. (₹)Cr. (₹)
    Bank A/c Dr.1,40,000
    Share Forfeiture A/c Dr.60,000
    To Equity Share Capital A/c2,00,000
    (Being 2,000 shares reissued at ₹ 70 fully paid)
    1½ marks

Answer: (i) Forfeiture ₹ 24,000; reissue at ₹ 9: Bank ₹ 5,400 + Forfeiture ₹ 600; Capital Reserve ₹ 4,200 (ii) Capital ₹ 1,60,000 + Premium ₹ 20,000 to Forfeiture ₹ 60,000 and Allotment ₹ 1,20,000; reissue Bank ₹ 1,40,000 + Forfeiture ₹ 60,000; no capital reserve

Where the marks are

  • (i) forfeiture, reissue, capital reserve (1 mark each)
  • (ii) forfeiture (1½ marks) and reissue (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.