ISC Board Questions/ Sample paper Questions

ISSUE OF SHARES

SHORT ANSWER
1. What are the closing entries for interest on calls in arrear account and interest on calls in
advance account? (ISC 2011)
2. State any 2 uses of securities premium reserve as per Companies Act. (ISC 2012)
3. Give two differences between Authorised capital and issued capital. (ISC 2013)
4. Give two differences between reserve capital and capital reserve. (ISC 2013)
5. State with reason whether a company can issue a share having face value of Rs. 20 at Rs. 17?
(ISC 2014)
6. Give the adjusting and closing entries for interest on calls in arrear due from a shareholder.
(ISC 2014)
7. What is the minimum price at which a company can reissue its forfeited shares which were
issued at par? (ISC 2015)
8. Give any two differences between reserve capital and capital reserve.( ISC 2016)
9. State where will the non-cash transactions be recorded at the time of issue of shares, if all cash
transactions are entered in the Cash Book. (ISC 2017)
9. What is the minimum price at which a company can reissue its forfeited shares which were
originally issued at par? (ISC 2018)
10. In what way, if any, can the balance in shares forfeited account be used? (ISC 2019)
11. State with reason whether Securities Premium Reserve can be used by a company to write off
the discount allowed to its debtors. (ISC 2020)
12. ISC 2022- Sem 1
Choose the incorrect statement from the following options;
a) Shares forfeited by the company cannot be reissued at a premium.
b) At the time of forfeiture of shares, Security Premium Reserve a/c is not debited with the
amount of premium already received.
c) The shares of a company cannot be issued at a discount.
d) Securities premium reserve cannot be used by the company to write off discount allowed
to its debtors.
Aanswer: a
12. ISC 2022- Sem 1
13. ISC 2022- Sem 1

14. ISC 2022- Sem 1

15. Apart from issuing shares to the general public for cash, list two other groups to whom a
company could issue shares for consideration other than cash. (SP 2015)
16. State the two conditions which must be fulfilled to re-issue the forfeited shares. (SP 2018)
17. If the operating cycle of a company cannot be identified, it is assumed to be:
(a) 18 months
(b) 12 months
(c) 10 months
(d) 15 months (SP 2022 Sem 1)
18. The Interest on Calls-in-arrears Account is closed by:
(a) Crediting it to Statement of Profit & Loss
(b) Crediting it to Profit & Loss Appropriation Account
(c) Debiting it to Profit & Loss Appropriation Account
(d) Debiting it to Statement of Profit & Loss (SP 2022 Sem 1)
19. Ronaldo Ltd. forfeited 300 equity shares of ₹ 10 each, fully called up, on which ₹ 5 per
share (including premium of ₹ 1 per share) was received. It later reissued these shares at a
discount. The maximum discount per share, which the company could have given on their
reissue would be:
(a) ₹ 6 per share
(b) ₹ 5 per share
(c) ₹ 4 per share
(d) ₹ 3 per share (SP 2022 Sem 1)
20. ABC Ltd. forfeited 4,000 shares of ₹ 10 each, fully called up, on which application money of
₹ 3 had been paid. Out of these 2,000 shares were re-issued as fully paid up. Upon their reissue,
the company transferred ₹ 4,000 to capital reserve. The rate at which these shares were reissued
were:
(a) ₹ 10 per share
(b) ₹ 4 per share
(c) ₹ 9 per share
(d) ₹ 8 per share (SP 2022 Sem 1)
21. SP 2022 Sem 1
(a) The Share Capital A/c was debited with:
(i) ₹ 10,000
(ii) ₹ 9,000
(iii) ₹ 12,000
(iv) ₹ 7,000
(b) The shares were forfeited for non-payment of:
(i) ₹ 10 per share
(ii) ₹ 9 per share
(iii) ₹ 12 per share
(iv) ₹ 7 per share
(c) At the time of reissue of shares, the Share Forfeiture A/c was debited with:
(i) ₹ 6,300
(ii) ₹ 7,000
(iii) ₹ 2,100
(iv) ₹ 1,400
(d) At the time of reissue of shares, the Share Capital A/c was credited with:
(i) ₹ 6,300
(ii) ₹ 7,000
(iii) ₹ 2,100
(iv) ₹ 1,400
(e) At the time of reissue of shares, the account credited with ₹ 1,400 was:
(i) Calls-in-arrears A/c
(ii) Capital Reserve A/c
(iii) Securities Premium Reserve A/c
(iv) None of the above
22. SP 2023
A company forfeits 1,000 shares of ₹ 10 each. It had received ₹ 6,000 on these shares. What is
the maximum discount that can be allowed by the company on the reissue of 400 shares?
(a) ₹ 4,000
(b) ₹ 400
(c) ₹ 1,600
(d) ₹ 2,400
23. ISC 2023
24. ISC 2023 IE
White Ltd. offered 20,000 shares of ₹ 10 each to the public. The public applied for 30,000 shares.
The company made pro-rata allotment in the ratio of 6:5 and the remaining applications were rejected
and money refunded to the applicants.
How many shares did shareholder Aarti apply for, if the company had allotted 80 shares to her?

(a) 66 Shares
(b) 96 Shares
(c) 90 Shares
(d) 120 Shares
25. SP 2024
Shiv, the holder of 100 shares paid his first call of ₹ 4 per share, due on 1st May, 2023, along with his
allotment money, on 1st September, 2023.
Interest is allowed by the company on calls-in-advance as per the provisions of Table F of the
Companies Act, 2013.
You are required to give the adjusting entry and closing entry for interest on
calls- in-advance.

26. ISC 2024

27. ISC 2024 IE

28. SP 2025

LONG ANSWER

1. ISC 2011
2. ISC 2012

3. ISC 2013
4. ISC 2014

5. ISC 2015
6. ISC 2016
7. ISC 2017
Cargo Ltd. invited applications for the issue of 20,000 Equity shares of ₹ 10 each at a premium
of ₹ 1 per share, payable as follows:
On Application ₹ 3
On Allotment The balance (including premium ₹ 1)
Applications were received for 30,000 shares and pro-rata allotment was made to the remaining
applicants after refunding application money to 5,000 share applicants.
Nicholas, who was allotted 3,000 shares, failed to pay the allotment money and his shares were
forfeited. Out of these forfeited shares, 1,000 shares were reissued as fully paid-up @ ₹ 8 per
share.
You are required to:
(i) Pass journal entries in the books of the company.
(ii) Prepare Calls-in-arrears Account.
(iii) Prepare Share Forfeiture Account.
8. ISC 2018
9. ISC 2019
Meera Co. Ltd. invited applications for 50,000, equity shares of ₹ 10 each at a premium of ₹ 2
per share, payable as follows:
On Application on 1st May, 2017 ₹ 2
On Allotment on 1st July, 2017 ₹ 5 (including premium)
On 1st and Final Call on 1st October, 2017 ₹ 5
The Company received applications for 62,500 shares. It was decided to:
(a) Refuse allotment to the applicants of 2,500 shares.
(b) Allot in full to the applicants of 10,000 shares.
(c) Allot the balance of the shares applied on a pro-rata basis among the other applicants.
(d) Utilize the excess application money in part payment of allotment money.
(e) Charge interest on calls-in-arrears, if any, @ 10% per annum.
All the money due was received except from one shareholder to whom 200 shares had been
allotted in full. The amount was due by him to the company even till the date of the Balance
Sheet, which was 31st March, 2018. The company charged interest on calls-in-arrears from the
shareholders from the date on which it was due till the Balance Sheet date.
You are required to, for the year 2017-18:
(i) Prepare the Cash Book to record the above issue of shares. (ii) Pass journal entries in the
Journal Proper (including entries for interest on calls-in-arrears).
10. ISC 2020
Sudesh Ltd. was registered with an authorised capital of ₹40,00,000 divided into 4,00,000
Equity Shares of ₹10 each. The company offered 50,000 shares to the public at a premium of ₹2
per share, payable as follows:
₹ 3 on application
₹ 6 on allotment (including premium)
₹ 3 on first and final call (due two months after allotment)
Applications were received for 60,000 shares and pro-rata allotment was made as follows:
Category A: The applicants of 40,000 shares were allotted 30,000 shares.
Category B: The applicants of 20,000 shares were allotted in full.
Excess money paid on application was utilized towards allotment. Nobby, a shareholder from
Category A, who had applied for 1,200 shares failed to pay the allotment and call money. Vineet,
a shareholder from Category B, who had been allotted 1,000 shares, paid the call money due,
along with allotment.
The company forfeited Nobby’s shares after the first and final call and paid interest on Callsin-
advance to Vineet @ 12% per annum on the day of the final call.
You are required to: (i) Pass journal entries to record the above transactions in the books of the
company (including entries for interest on Calls-in-advance). (ii) Prepare Calls-in-arrears
Account.
11. ISC 2021
12. SP 2015
Moonlight Ltd. issued 50,000 Equity shares of `10 each at a discount of `1 per share payable:
On application `3
On allotment `3
On First and Final Call The balance.
The public applied for 65,000 shares. Pro-rata allotment was made to the applicants of 60,000
shares. Where no allotment was made, money was to be refunded in full. Shyam, who had
applied for 600 shares failed to pay the allotment money and on his subsequent failure to pay the
call money, his shares were forfeited. Suren, who was allotted 400 shares failed to pay the call
money and his shares were forfeited after the call.
Later the company reissued 700 of the forfeited shares at `8 per share credited as fully paid up,
the whole of Suren’s shares being included.
You are required to pass journal entries in the books of Moonlight Ltd.
13. SP 2017
Nickel Ltd. issued Equity shares of ₹10 each at a premium of ₹3 per share payable as ₹4 per
share on application, ₹5 per share on allotment (including premium), ₹2 per share on first call
and ₹2 per share on final call. Amit, who had applied for 2,000 shares, was allotted 1,200 shares.
He failed to pay the allotment money and on his failure to pay the first call his shares were
forfeited. Out of the forfeited shares, 1,000 were reissued at ₹7 per share. You are required to
pass journal entries for forfeiture and reissue.
14. SP 2017
Carbon Ltd. forfeited 800 shares of ₹20 each issued at a premium of ₹2 per share (₹18 called
up) on which first call of ₹4 per share was not paid. Of these 300 shares were re-issued @ ₹15
per share as ₹18 paid up. You are required to pass journal entries for forfeiture and reissue.
15. SP 2018
Zen Ltd. issued 10,000 equity shares of `10 each at a premium of ` 3 per share payable as:
On Application ` 4
On Allotment ` 5 (including premium)
On First Call ` 2
The balance as and when required
The public applied for 12,000 shares. The company made pro-rata allotment to all the applicants.
One shareholder who was allotted 900 shares paid the entire amount with allotment while
another shareholder who had applied for 1,200 shares, failed to pay the allotment money and on
his subsequent failure to pay the first call his shares were forfeited. Of the forfeited shares, 800
were reissued at ` 7 per share.
You are required to prepare: (i) Share Allotment Account (ii) Securities Premium Reserve
Account. (iii) Share Forfeiture Account. (iv) Calls-in-Arrears Account.
16. SP 2023
In the year 2021-22, Yamuna Limited Co. was registered with an authorized capital of ₹
1,00,000 in ₹ 10 per Equity share. Of these, 4,000 equity shares were issued as fully paid to
vendor for the purchase of Plant and Machinery and 6,000 shares were subscribed for by the
public.
During the first year, ₹ 6 per Equity share was called up, payable:
₹ 3 on Application
₹ 1 on Allotment
₹ 2 on the First Call
The amounts received in respect of these shares were as follows: On 5,000 shares the full amount
called On 600 shares ₹ 4 per Equity share On 400 shares ₹ 3 per Equity share. The company
forfeited all those shares on which only ₹ 3 had been received and reissued them at ₹ 4 per
share.
You are required to:
(i) Pass journal entries to record the above transactions in the books of the company.
(ii) Prepare the Calls-in Arrears Account.
17. SP 2023
Tapsi Ltd. invited applications from the public for the issue of 55,000 Equity shares of ₹ 10 each
payable as:
₹ 3 on Application
₹ 5 on Allotment
Balance on Call
The public applied for 50,000 shares which were duly allotted by the company. ₹ 2,49,000 were
received by the company on allotment and ₹ 99,400 on call. The company forfeited those shares
on which both, allotment and call money was not received. 70% of the forfeited shares were
reissued at ₹ 7 per share, fully called up. The company paid share issue expenses of ₹ 20,000
which were completely written off at the end of the year. The company had ₹ 15,000 in its
Securities Premium Reserve Account.
You are required to pass journal entries to record the above transactions in the books of the
company.
18. ISC 2023

19. ISC 2023

20. ISC 2023 CE

Shakti Ltd., with an authorised capital of ₹ 80,00,000 divided into 80,000 Equity shares of ₹ 100
each, issued 50,000 shares to the public, payable as follows:

₹ 30 on Application
₹ 30 on Allotment
₹ 40 on First & Final Call.
The public applied for 60,000 shares. Applications for 10,000 shares were rejected and money
received on these shares was refunded.
Jaya, who was allotted 500 shares failed to pay the allotment money and on her subsequent failure to
pay the call money, her shares were forfeited.
Hema, who was allotted 300 shares failed to pay the call money and her shares were forfeited after
the call.
Later, the company reissued 600 of the forfeited shares at ₹ 120 per share credited as fully paid up,
the whole of Hema’s shares being included.
You are required to pass journal entries to record the above transactions in the books of Shakti
Ltd.

21. ISC 2023 CE

Disha Ltd. was registered with a capital of ₹ 5,00,000 divided into 50,000 Equity shares of ₹ 10
each. It issued 20,000 shares at a premium of ₹ 2 per share, payable as follows:

On Application ₹ 2 per share

On Allotment ₹ 6 per share (including premium)
On First Call & Final Call ₹ 4 per share (due on 1st March, 2022, three months after
the allotment)
The subscription was at par. All money payable on allotment was duly received.
Ali, a shareholder holding 500 shares paid the amount due on his first and final call along with the
allotment money.
According to the Articles of Association of the company, interest @ 12% per annum was payable by
the company on any calls-in-advance. The interest on calls-in-advance was paid by the company to
Ali on 1st March, 2022.
You are required to pass journal entries to record the above transactions in the books of Disha
Ltd.

22. SP 2024

In the year 2022-23, Paresh Ltd. invited applications for 25,000 equity shares of ₹10 each payable as
follows:

On application ₹ 5 per share

On allotment ₹ 3 per share
On call ₹ 2 per share
Applications were received for 50,000 shares. It was decided:
(i) To allot 50% to Shyam who had applied for 10,000 shares.
(ii) To allot in full to Kevin who had applied for 10,000 shares.
(iii) To allot the balance of the available shares on pro rata basis among the other applicants.
(iv) To utilise the excess application money in part payment of allotment and final call.

Till the Balance Sheet as at 31st March, 2023, the company had asked the shareholders to pay up to
the allotment stage.
The amount due on the allotment was received from all shareholders except from Kevin, whose
shares were immediately forfeited by the company.
You are required to pass journal entries in the books of the company to record the above
transactions.

23. SP 2024
Following is an extract from the Journal of MM Ltd. You are required to complete the journal
entries filling up the information represented by ‘?’ which is missing from these journal
entries.
Additional information:
MM Ltd. issued 20,000 Equity shares of the face value of ₹ 10 each at a premium of
₹ 5 per share, payable:
₹ 5 on application;
₹ 6 on allotment (including premium);
₹ 3 on first call;
The balance as and when due
You are required to complete:

• The journal entry for forfeiture of shares.

• The journal entry for reissue of shares, clearly mentioning the number of forfeited
shares reissued by the company.

24. ISC 2024

25. ISC 2024
26. ISC 2024 IE
27. ISC 2024 IE

28. SP 2025
29. SP 2025